2017 was marked by some record-breaking highs, shocking news stories and trends that will impact your year ahead. Here is an economic review of the past year and how those events will play a role in 2018:
Markets at an All Time High
Back in January, the Dow Jones industrial average broke 20,000 for the first time. It hit 24,000 in November. Political uncertainty wove its way throughout the year, but the stock market was mostly unaffected. This is partially because business confidence grew, encouraging companies to spend. The U.S. economy even experienced its best six-month period of growth in three years, and unemployment fell to a 17-year low.
What about 2018? Wall Street pros expect stocks to stay about where they are now, or even increase over the next year. Therefore, they are expecting the bull market to march on.
The 2017 tax reform, known as the Tax Cuts and Jobs Act, made big changes to the tax codes. Some of them are taking effect as soon as New Year’s Day.
There are four changes to the individual tax codes that will begin Monday and expire at the end of 2025:
- Expanded child tax credit
- Doubled exemption for estate taxes
- Increased exemption for the alternative minimum tax
- Individual tax cuts
In 2019, there will no longer be deductions for alimony payments for new divorces, and the individual mandate for Obamacare will be repealed.
Business owners will also see new changes as soon as Monday. The corporate tax rate will drop from 35 percent to 21 percent as of January 1, 2018.
Additionally, interest deductions can only be 30 percent of earnings before interest, taxes, depreciation and amortization as of 2018. That 30 percent in interest deductions will not include depreciation or amortization as of 2022.
Those are just some of the major changes on the horizon, but you can read a more comprehensive guide here.
Data breaches consistently made headlines in 2017, and it seemed no one was too big to fall. The most noteworthy was arguably Equifax, whose data was stolen over the summer. Equifax housed millions of Americans’ most precious information, which is what made the breach so dangerous. Here is a guide for how to protect yourself in the wake of the Equifax data breach, if you haven’t done so already.
There were other breaches as well, including the RNC voter data breach that compromised the personal information of almost every registered voter in the United States; the Whole Foods data breach discovered in September; and the 560 million login credentials leaked from a database of passwords from popular websites like Adobe and DropBox.
These breaches highlighted how crucial and fragile online protection is. They may affect personal identification going forward. Congress is already rethinking the use of social security numbers.
Cryptocurrency – a digital currency – was not new to 2017. But this is the year that put it on the map, especially Bitcoin. The price of Bitcoin soared in 2017 when companies like Cboe Global Markets Inc. (and now Nasdaq Inc. and CME Group Inc.) started using digital currencies for futures trading. Bitcoin is valued at about $300 billion as of this month.
With the popularity of Bitcoin, new cryptocurrencies have, consequently, experienced explosive growth. This trend is expected to continue into 2018. Another trend that is likely to continue is the price instability of cryptocurrency, with prices flying high one day, dipping two days later, and launching even higher a few days after that.
Looking at the year ahead, experts believe cryptocurrencies will continue to rise in price, a trend that will help legitimize that space.
2017 was a year of dramatic changes for the United States and the world economy as a whole, and those changes are setting the scene for a fascinating year ahead.