NABE: Forecasters Expecting Another Good Year
According to a recent survey from the National Association for Business Economics (NABE), the survey panelists’ median forecast is for real GDP to increase 3.1% on an average annual basis this year followed by a 2.9% rise in 2016. This compares to a gain of only 2.4% 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% by the second half of 2016.
“Against this backdrop, 88% of panelists believe the Federal Reserve will commence tightening of monetary policy in the second or third quarter of 2015,” said John Silvia, chief economist at Wells Fargo. “Fifty-five percent expect a third quarter ‘liftoff’—up from the 46% who held this view in the December Outlook survey. The federal funds rate is forecasted to reach 0.75% by the end of the year—identical to expectations in December—and 2% by the end of 2016. Forecasts for both years are similar to the median assessment of members of the Federal Open Market Committee (FOMC) communicated in March.”
The following was excerpted from the NABE news release:
To read the entire release, click here.