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GDP Growth Could Modestly Accelerate in 2017

With full-year 2016 GDP growth coming in at only 1.6%, Morningstar’s Bob Johnson thinks this year will only be slightly higher as potential catalysts like tax reform and stimulus could take some time to take hold.

Jeremy Glaser: We had 1.6% for the full-year 2016; where do you see 2017 then?

Bob Johnson: I think it will be somewhere between 1.75% and 2%. I mentioned earlier that inventory took off about a quarter of a percent. I think that will probably be flat this year. It's unusual that it had that big a subtraction, so I think that we'll get back to 2% from that and then you've got the demographic headwind and you'll probably be somewhere in that 1.75% to 2% range. A little better than the full-year 2016 number, but certainly not as large as many people are expecting.