The U.S. Economy on Growth Path for 2017, According To Decision Analyst’s Economic Index
Arlington, Texas—The Decision Analyst U.S. Economic Index stood at 113 in February 2017, a 5-point increase from February 2016. This year-over-year strengthening in the U.S. Economic Index signals continued U.S. economic growth during the first half of 2017—and probably the second half of 2017 as well. The Economic Index tends to lead U.S. economic activity by 6 to 12 months. Below is the past-10-year history of the U.S. Economic Index.
“The overall trend of the U.S. Economic Index over the past year indicates that 2017 is off to a positive start, with a high likelihood that the economic expansion will continue through most of 2017,” said Jerry W. Thomas, President/CEO of Decision Analyst. “However, the change of political power in Washington D.C., carries with it risks of economic distractions and turmoil. Disruptions in the flow of imports and exports could have major negative effects on the U.S. economy if the Trump administration pursues trading restrictions, and the possible disruption of the healthcare industry related to efforts to repeal the Affordable Care Act likewise carries economic risks. The duration of this massive economic slowdown (a decade and counting) means that many companies will not be able to delay critical investments in equipment and facilities much longer, and an upturn in corporate investments could fuel more rapid economic growth. We continue to believe that higher rates of interest would be good for the U.S. economy long-term,” said Thomas. “More normal interest rates would help reduce corporate financial engineering, help deflate the huge private equity/venture capital bubble, and reduce speculation and speculative investments in marginal opportunities.”
The U.S. Census Divisions have increased in the past 12 months, except for the East South Central Division. The South Atlantic Division had the highest score of all the Census Divisions, followed by the Middle Atlantic. The South Atlantic Census Division registered an Index score of 116 for February 2017, an increase of 8 points from February 2016. The Middle Atlantic Census Division registered 115 for February 2017, which is also an increase of 8 points in the past 12 months. The East South Central Census Division had the lowest Index score, a 110 for February 2017, and declined 1 point in the past 12 months.
The following chart compares Decision Analyst’s U.S. Economic Index to the Economic Indices for other countries. Globally, most countries are moving in a positive direction, including—for the first time—all countries being reported in South America. Brazil has increased 11 points in the past 12 months, while Chile has increased 8 points, and Colombia has increased 7 points. In Europe, France and the Russian Federation have each increased 9 points in the in the past 12 months, while Spain has declined 7 points.
The Decision Analyst Economic Index is based on a monthly online survey of several thousand households balanced by gender, age, and geography. The scientific survey is conducted in the last 10 days of each month. The Economic Index is calculated from 9 different economic measurements using a sophisticated econometric model. The result is a snapshot of coming economic activity in each country surveyed, as seen through the eyes of representative consumers living in the respective countries.
Decision Analyst conducts its concurrent economic surveys each month in Argentina, Australia, Brazil, Canada, Chile, Colombia, France, Germany, India, Italy, Mexico, Peru, the Russian Federation, Spain, United Kingdom, and the United States. Whenever the Decision Analyst Economic Index is greater than 110, it tends to signal an expanding economy. An Index value of 90 to 110 suggests a no-growth or slow-growth economy, and near or below 90 generally indicates economic contraction. These guidelines vary by country, however.
About Decision Analyst
Decision Analyst (www.decisionanalyst.com) is a global marketing research and analytical consulting firm specializing in strategy research, new product development, advertising testing, and advanced modeling for marketing decision optimization. For over 35 years, the firm has delivered competitive advantage to clients throughout the world in consumer-packaged goods, telecommunications, retail, technology, medical, and automotive industries.
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