A national group of economic forecasters is raising its outlook for the U.S. economy for the next two years.
The March report from the National Association for Business Economics (NABE) forecasts more hiring, a lower unemployment rate, a lower inflation rate and more growth in consumer spending in 2015, compared with the group’s forecast December 2014.
The report, released Monday, also forecasts more investment by businesses in both equipment and intellectual property and modest growth for the U.S. stock market.
“NABE’s March 2015 Outlook Survey panel expects a markedly stronger pace of economic growth in 2015 and 2016 than was recorded last year,” said NABE president John Silvia, chief economist of Wells Fargo. “The panelists’ median forecast is for real GDP to increase 3.1 percent on an average annual basis this year followed by a 2.9 percent rise in 2016. This compares to a gain of only 2.4 percent in 2014. Healthier consumer spending, housing investment, and government spending growth are expected to make outsized contributions to the projected acceleration in overall economic activity. Accordingly, recent labor market strength is expected to continue. The panelists’ median forecast is for net new job creation to average approximately 250,000 per month in 2015 and 216,000 per month next year. The unemployment rate is expected to continue its downward trend over the next several quarters, reaching 5 percent by the second half of 2016.”
Other factors driving the improved forecast include an increased pace of activity in the housing sector, a strong U.S. dollar and continued low oil prices.
Meanwhile, 88 percent of the panel of 50 professional forecasters predicted the Federal Reserve will start increasing interest rates in the second or third quarter of this year.
Gross domestic product is expected to grow 3.1 percent in 2015, unchanged from the December forecast.
“The improved consumer spending outlook may be attributable to the psychological impact of lower gasoline prices, as well as improving employment and income growth,” the report noted.
The Metropolitan Milwaukee Association of Commerce (MMAC) is expected to post its second quarter Business Outlook Survey later this week.
