The economy of the United States is expected to grow stronger at least in the first year of Donald Trump's presidency. December saw U.S. consumer spending climb, signaling increasing consumer confidence.
Reuters reported domestic demand was strong in December as reflected in the rise of U.S. consumer spending to 3.8% in 2016 from 3.5% increase in 2015. Consumer spending in the U.S. could further grow if Trump keeps his promise to cut back corporate taxes.
It appears that Trump's failure to offer details on his economic plans for the U.S. did little to deter consumers from spending. Trump's presidency seems to have boosted consumer confidence, especially in the domestic market. Trump is championing protectionist ideals, promising Americans that he will push for economic and trade policies that will put the U.S. first.
The rise in U.S. consumer spending was largely attributable to the increase in consumer purchases during the holiday season and the higher sales of cars, Bloomberg News reported. Lower turnover rates as companies continue to hire employees instead of letting them as well as low borrowing costs are pushing consumers to spend more and more.
If the trend continues, the U.S. economy is expected to enjoy another stable year in 2017. In addition to the increase in consumer spending, more and more consumers are also buying previously owned homes, signaling that the housing market could be getting healthier.
With the positive data on consumer spending, housing market, job reports and pricing pressure, the Federal Reserve might be able to increase interest rates at least three times in 2017. Some industry observers believe that the U.S. actually should have pushed for higher interest rates in 2016.
In 2016, the United Kingdom's economy was the fastest growing advanced economy, Jobs & Hire previously reported. The country's economy grew 0.6% during the last quarter of the year.