The U.S. EconomySlow, Albeit Improving
2014; Volume: 33; Issue: 2 Linguagem: Inglês
ISSN
1930-126X
Autores Tópico(s)Fiscal Policy and Economic Growth
ResumoPARTICIPANTS I Beacon Economics = Los Angeles, California; Conf. Board = Conference Board, New York, New York; Fannie Mae = Fannie Mae, Washington, D.C.; IFIS= IFIS Global Insight, Eddystone, Pennsylvania; GSU - EFC = Georgia State University, Economic Forecasting Center, Atlanta, Georgia; Moody's Economy = Moody's Economy.com, Westchester, Pennsylvania; Mortgage = Mortgage Bankers Association, Washington, D.C.; NAM = National Association of Manufacturers, Washington, D.C.; Northern Tr = Northern Trust Company, Chicago, Illinois; Perryman Gp = The Perryman Group, Waco, Texas; Royal Bank of Canada, Toronto, Ontario, Canada; SP UBS = UBS Bank, Salt Lake City, Utah; US Bank = U.S. Bank, Minneapolis, Minnesota; US Chamber = U.S. Chamber of Commerce, Washington, D.C.; Wells Fargo = Wells Fargo Bank, San Francisco, California.The year 2014 will not be remembered for dramatic improvement in output and employment. Rather, there has been a continuation of the prior five years of gradual steady growth. Concern over the U. S. economy backsliding has subsided. There are some risks in both domestic and international financial markets, but they seem unlikely to derail the expansion at this time, according to Ray Perryman of Perryman Group. Consensus is projecting GDP to grow at the rate of 2.4% during the consensus period. Job gains in better paying jobs are expected to boost employment and real income, which are critical for continued economic expansion, provided the harsh winter of 2013-2014 is not repeated.CONSUMERSConsensus expects to remain cautious for several reasons. Unemployment is expected to remain close to 6%. Large numbers of discouraged workers have left the market, although there are many who are back in school for learning new skills. Consensus data reported here show a declining PCE/PDI ratio despite gradual improvement in employment numbers as well as historically low interest rates on savings. Therefore, growth in demand will remain steady, but not too strong to trigger inflation, which is the concern of the Fed.FIRMSUnemployment is expected to hit the 6% mark. Gradual growth rate in employment and income, combined with stable wages, have created optimism for firms as reflected in Non-Residential Fixed Investment. Consensus expects nonresidential capital investment to grow at the rate of 4.7% during the consensus period, which is almost double the rate of the expected GDP growth. Long-term unemployment has made workers cautious about asking for wage hikes that contributed to wage stability. …
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