According to the National Association for Business Economics (NABE), the U.S. economy is expanding at a moderate pace. The NABE Outlook Survey, released on September 10, 2019, showed that the median forecast for real GDP growth in 2019 is 2.3%, down from the 3.0% growth forecast in the previous survey released in June. The outlook for 2020 is for growth of 2.0%.
The NABE Outlook Survey is based on a survey of professional forecasters and is conducted quarterly. The latest survey was conducted from August 5-27, 2019 and includes the responses of 48 professional forecasters.
The NABE survey showed that the median forecast for inflation, as measured by the personal consumption expenditures (PCE) price index, is 1.8% in 2019 and 1.9% in 2020. The unemployment rate is forecast to end 2019 at 3.7% and 2020 at 3.5%.
The NABE Outlook Survey showed that the median forecast for corporate profits is for growth of 5.0% in 2019 and 5.5% in 2020.
The NABE survey showed that the median forecast for housing starts is for 1.26 million starts in 2019 and 1.30 million starts in 2020.
The NABE Outlook Survey is available at:
http://www.nabe.com/Surveys/Pages/NABEOutlookSurvey.aspxAccording to the latest economic news, the US economy is showing signs of improvement. The job market is slowly improving, and inflation is under control. However, the trade deficit is still a concern.The U.S. economy is in a good place right now. Unemployment is low, and wages are rising. The stock market is doing well, too. But there are some potential problems on the horizon. The trade war with China is one of them. Another is the possibility of a recession.
The trade war with China is a big deal. It’s already having an impact on the U.S. economy. And it could get worse. The trade war could cause prices to go up for consumers. It could also lead to job losses.
The possibility of a recession is also a concern. A recession is when the economy shrinks for two consecutive quarters. It’s a big deal because it can lead to job losses and lower wages.
The good news is that the U.S. economy is strong right now. And, it’s possible that the trade war with China will be resolved. But it’s important to keep an eye on these potential problems.The U.S. economy added a robust 312,000 jobs in December, capping a year of solid hiring and providing more evidence that the nearly 10-year-old expansion remains on track.
The Labor Department’s report Friday also showed that wages rose a healthy 3.2 percent in 2018, the best annual gain in nearly a decade. And the jobless rate ticked up to 3.9 percent from 3.7 percent in November, only because more people began looking for work.
The strong finish to 2018 suggests that the economy has enough momentum to withstand any potential damage from the partial federal government shutdown, now in its third week.
“This is a great jobs report,” said Mark Zandi, chief economist at Moody’s Analytics. “The labor market is red hot.”
The job gains were widespread. Manufacturing added 32,000 jobs, after losing jobs in November. And retailers, hotels and restaurants all added workers.
The job market has been remarkably resilient in the face of President Donald Trump’s trade wars and other headwinds. The economy has added an average of 222,000 jobs a month this year, only slightly below the 2017 average of 223,000.
With the December gain, employers have added 2.6 million jobs over the past two years, a healthy pace that has drawn millions of Americans off the sidelines and back into the workforce.
“The economy is still chugging along,” said Gus Faucher, chief economist at PNC Financial Services.
The economy’s strength has helped drive the stock market to record highs. The Dow Jones industrial average surged 567 points Friday, its biggest gain in eight months, to close at 24,706.35.
The job market’s strength has also bolstered consumer confidence, which has reached its highest level since 2000. That has helped fuel strong spending by Americans, which has kept the economy expanding despite Trump’s trade wars and the weakening global economy.
The economy grew at a solid annual rate of 3.4 percent in the July-September quarter. And many economists expect growth will remain around 3 percent in the current quarter.
The solid job market has also helped reduce the number of long-term unemployed — those out of work for 27 weeks or more — to 1.3 million, the fewest since December 2000.
The number of Americans working part time but who would prefer full-time work has also declined sharply, to 4.5 million from a peak of 9.3 million in 2010.
Still, the number of Americans working part time for economic reasons — because their hours have been cut or they can’t find a full-time job — rose to 5.2 million in December from 4.8 million in November.
And the proportion of Americans working part time who would prefer full-time work, at 8 percent, is still higher than it was before the Great Recession began in December 2007.
There are also nearly 1.5 million Americans who are “marginally attached” to the workforce, meaning they want a job but haven’t looked for one recently. And nearly a quarter of them — 350,000 — have been out of work for more than a year.
The economy’s solid performance has helped keep the Federal Reserve on track to gradually raise interest rates. The Fed raised rates four times in 2018 and is widely expected to do so twice this year.
But some economists believe the Fed will slow its rate hikes this year if the economy slows, as many expect. The tax cuts that Trump pushed through Congress in late 2017 are widely expected to fade this year, and Trump’s trade wars could escalate, further damaging exports.
“The Fed will be paying very close attention to how the economy is performing in the first half of this year,” Faucher said.