5 Indicators to Watch for Where the Trump Economy is Going

With a new administration moving into the White House, here are five key indicators to watch to help you understand how the economy is faring, according to U.S. News & World Report.

  1. Rate of net non-residential fixed investment. It is good news if net investment is expanding.
  2. Capital flows. It is good for the economy if capital is flowing into the U.S. and bad if it is flowing out, according to the article.
  3. Yield curve. The difference between yields on the 2- and 10-year U.S. Treasury notes is a good predictor of good times ahead or a recession. If the 2-year is higher than the 10-year, that is an early warning sign of a recession. “The 10-year T-note is yielding 2.42 percent and the 2-year is yielding 1.21 percent. That means the current difference between the yields of the two bonds is a positive 1.21 percent. Which means we are in the safe zone, for now,” according to the article.
  4. Defaults. The default rate reflects the health of the economy. If defaults start to climb, it is a sign of trouble ahead for the economy.
  5. The strength of the U.S. dollar. As the dollar increases in strength against other currencies, it becomes harder for countries and individuals in those countries who have taken dollar-denominated loans to pay them back, according to the article.

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