Please enable JavaScript to view the comments powered by Disqus.

Economic Forecasts

Economy to Keep Just Puttering Along

Kiplinger's latest forecast for the GDP growth rate


GDP 1.4% growth for the year; a 2% pace in '17 More »
Jobs Hiring at 150K-200K/month through '16 More »
Interest rates 10-year T-notes at 1.9% by end '17 More »
Inflation 1.8% for '16, 2.4% in '17 More »
Business spending Flat in '16, slight gain in '17 More »
Energy Crude oil trading from $40 to $45 per barrel in Dec. More »
Housing Prices up 5% in '16, 6% in '17 nationally More »
Retail sales Growing 3.4% in '16 and '17 (excluding gas) More »
Trade deficit Widening 4% in '16 More »

The U.S. economy is growing, albeit slowly, paced by job gains and consumer spending. Keeping a rein on growth: weak business and government spending as well as droopy export sales.

Consumer spending jumped 4.3% in the second quarter. In contrast, businesses lowered spending on inventories by a whopping $50 billion, annualized, while cutting investment in structures and equipment by $10 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% to 2.5% pace, moderately higher than first-half growth that averaged just 1.1%.

See Also: All Our Economic Outlooks

Second-half growth could be stronger if businesses resume adding to inventories. But keep in mind that the specter of a U.S. dollar growing stronger, uncertainty surrounding the U.S. presidential contest and risks to global growth could continue to dampen business investment and make consumers more cautious, too.

GDP growth in 2017 will likely be a tad better, at around 2%, as continuing job and wage gains 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 more predictable after the November elections.

See Also: Guess When the Next Recession Will Be

Source: Department of Commerce: GDP Data