According to a new report conducted by a business group, there will be an even bigger 2015-2016 U.S. economic boost compared to the December 2014 forecast.
The March report for 2015, released by the National Association for Business Economics (NABE), sees a boost in hiring power, a drop in unemployment rate, a weaker inflation rate and more powerful consumer spending. The forecast is different from the initial forecast released in December 2014.
The report, communicated on Monday March 30, also describes an increase in equipment and intellectual propriety financing by businesses along with a decent growth in stock prices.
As the association’s president and also chief economist at Wells Fargo, John Silvia, explained:
“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.”
Among other factors that will contribute to the economic boost there is the development of activity in the housing sector, the dollar’s high value and the steady and low oil prices.
According to the report, the standard price of crude oil, which in December 2014 dropped to $59 (compared to $98 per barrel in December 2013), will reach an average of $61 per barrel at the end of 2015. The December 2016 average was calculated at $69 per barrel. The initial report announced three months ago stated the benchmark price for crude oil would be $85 per barrel by December 2015.
The NABE report also included some less exciting forecasts. The current year is expected to see a rise in U.S. trade deficit, with a 0.1 percent decrease in the current year’s hourly compensation growth compared to December’s prediction. The 2015 corporate growth is also expected to decrease by 2 percent to 4.7 percent in comparison to what was forecast in December 2014.
About 88 percent of the 50 professional forecasters included in the panel, consider the Federal Reserve will increase interest rates during 2015’s Q2 or Q3.
Other forecasts mentioned in the report are:
- Additional 251,000 jobs per month in 2015 and 216,000 per month in 2016
- S. unemployment rate will drop from the current 5.5.percent which is already the lowest value of the last 7 years to 5.4 percent in December 2015 and 5.1 percent in 2016
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