U.S. economic growth to expand soundly in 2017, housing market likely to contribute positively to growth

The subdued economic growth of the U.S. recorded in the first quarter of this year is unlikely to continue or extend into the remainder of the year, noted Wells Fargo in a research report. Weather and weather-related issues adversely impacted the consumers in the nation in the March quarter and made personal consumption expenditures quite subdued, expanding just 0.3 percent.

As a whole, the U.S. economy expanded just 0.7 percent in the period, the most subdued performance since the rebound from the Great Recession. But the housing market added 0.5 percentage points to top-line growth as residential investment rose sharply by 13.7 percent because of warm weather in some regions of the U.S., but particularly in the Northeast.

This might exert pressure on residential investment in the second quarter; however, the housing market is expected to continue to add positively to economic growth in the remainder of the year, stated Wells Fargo in a research report. Moreover, personal consumption expenditures are expected to recover strongly. This is based on the persistent strength of the U.S. labor market that generated 211,000 jobs in April and on a very low jobless rate that reached 4.4 percent.