A strengthening labor force leading to stronger consumer spending and gradual housing market gains, combined with a tempered tightening of Fed monetary policy to preserve the burgeoning economic expansion mean the pieces are in place for the economy to grow by 2.9% in 2015, according to a forecast by James Marple, TD Bank Group senior economist.
U.S. financial officers gave the economy its highest score in five years and were significantly more confident about economic growth in 2013 in the latest Bank of America Merrill Lynch CFO Outlook survey.
TD Economics said in its latest quarterly economic forecast that economic growth over the last year has been modest, but healing has continued as the housing market has become a tailwind rather than a headwind. The worst of the deleveraging cycle and its dampening effect on economic growth appears to be over, TD says, but, just as the U.S. economy appears set for take-off, one obstacle remains.
Reuters reported that borrowing by small U.S. businesses rose marginally in December, suggesting headwinds for economic growth for the first few months of 2013, citing the latest Thomson Reuters/PayNet Small Business Lending Index.
Keith Hembre, chief economist at U.S. Bank, notes in his 2013 outlook that the economy is nowhere near its productive capacity and a sharp slowing in profit growth in recent quarters suggests the outlook for business investment is “fairly muted.”
Phoenix Management Q2 Survey: Lenders Identify Political Uncertainty as Chief Concern Regarding Future Economic Growth
Each quarter Phoenix Management distributes its proprietary “Lending Climate in America” survey to over 2,000 lenders nationwide. In the prior two quarters (Q1/12 and Q4/11), Phoenix saw significant improvement in nearly all of the lending survey metrics, including improving economic trends, relaxed credit facility structures and accelerating customer growth plans. While overall lender sentiment remains near recent survey highs, results from the most recent survey (Q2/12) reveal a tempering of lender enthusiasm.