Washington’s regional economy slowed in December, downshifting from an otherwise healthy 2017, according to a report released Tuesday by the the Stephen S. Fuller Institute at George Mason University. The results may reflect impacts from the dysfunction of Capitol Hill and complicate the outlook for 2018.
The institute’s Washington Coincident Index, a broad measurement of the area’s current economic health—that takes into account consumer confidence, wage and salary growth, airport passenger volumes, and retail sales—dipped 1 percent in December from the previous month, although it was more than 2 percent higher than December 2016.
Meanwhile, the Institute’s Washington Leading Index uses a mix of initial unemployment claims, consumer expectations, durable goods retail sales and building permits to project the economy’s direction over the next six to eight months. This index fell 1.35 percent in December from a year earlier, according to the report.
The report notes that although the near-term outlook remains strong, the possibility of chaos on Capitol Hill undercutting local economic performance will remain a key concern going forward:
While the region’s economy is projected to register its strongest growth in 2018 since 2015, the December performances of the Leading and Coincident Indices should not be ignored. The threat of a federal government shutdown and the failure of Congress to pass the FY 2018 budget may have negatively impacted the region’s economy in December. The economy also may have been adversely impacted by the unusual cold weather, including three snow events, the region’s experienced during the second half of the month. Uncertainty is never good for the economy and with continuing congressional confrontation with the Administration this uneven economic performance may be reflected in the early months of 2018.
Read the full report here.