PNC Bank economists release national economic outlook

Staff report

YOUNGSTOWN

PNC Bank economists Wednesday released their national economic outlook that shows an improvement in consumer and business confidence.

Both the University of Michigan’s consumer sentiment measure and the Conference Board’s consumer confidence index are up sharply since the election of President Donald J. Trump, the outlook says.

The Business Roundtable survey and the National Federation of Independent Business’s small business optimism index have also jumped since the election.

Housing starts were up in the first quarter of 2017 to more than 1.2 million at a seasonally adjusted annualized rate, the strongest pace since the start of the housing bust in 2007, the outlook noted.

Residential construction permits in the first quarter were at the highest level in almost a decade. PNC economists say the fundamentals for housing remain solid with an improving labor market and good affordability. Mortgage rates, although higher than they were before the election, remain low and have come down recently. Residential construction is expected to add to economic growth through the rest of this year.

Consumer spending growth was soft in the first quarter, partially because utilities spending was down.

Economists say consumers are in good shape with the number of jobs steadily increasing, wages rising, low consumer debt relative to income, low interest rates and household wealth is going up with rising stock prices and home values.

PNC says the national economy will look better later in the year, with real gross domestic product, GDP, growth of about 3.3 percent. Growth is expected to be 2.3 percent for all 2017, and then stronger at 2.9 percent in 2018, as personal and corporate income-tax cuts and infrastructure spending boost demand.

The unemployment rate will remain near its current 4.5 percent throughout 2017.