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Economic Forecasts

Uncertainty Clouding GDP Outlook

GDP 1.4% growth for the year; a 2% pace in '17 More »
Jobs Hiring slowing to 150K-200K/month by end '16 More »
Interest rates 10-year T-notes at 1.4% by end '16 More »
Inflation 1.5% for '16, 2.5% in '17 More »
Business spending Flat in '16, slight gain in '17 More »
Energy Crude oil trading from $40 to $45 per barrel in Sept. More »
Housing Prices up 5% on average in major metro areas More »
Retail sales 4% growth in '16, compared with 4.8% in '15 (excluding gas) More »
Trade deficit Widening 4% in '16, after a 6.2% increase in '15 More »

The U.S. economy continues to plod along in lackluster fashion, as evidenced by the fact that the gross domestic product climbed at just a 1.2% annualized rate in the second quarter.

See Also: All Our Economic Outlooks

Robust consumer spending, which jumped 4.2% in the second quarter, helped offset lower investment by businesses. Firms lowered spending on inventories by a whopping $49 billion, annualized, while cutting investment in structures and equipment by $18 billion.

For the year as a whole, we now see U.S. GDP growing by about 1.4%, versus 2.6% in 2015. Figure on growth in the second half of the year to be at a 2% pace, moderately higher than first-half growth that averaged just 1%. But keep in mind that the specter of a U.S. dollar growing stronger, uncertainty surrounding the U.S. presidential contest and other risks could further dampen business investment and make consumers more cautious, too.

GDP growth in 2017 will likely be a little better, at around 2%. Continuing job and wage gains will further pad Americans’ pockets with disposable income. Another bright spot: The housing market, which is seeing strong demand for new homes, keeping builders busy. Business investment overall should perk up once the lay of the land, political and otherwise, becomes a bit more predictable.

See Also: What the Fed's Eventual Rate Increase Means to You

Source: Department of Commerce: GDP Data

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