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Economic Forecasts

Job Growth to Tee Up Fed Rate Hike

Kiplinger's latest forecast on jobs


GDP 1.5% growth for the year; a 2.1% pace in '17 More »
Jobs Hiring at 150K-200K/month through '16 More »
Interest rates 10-year T-notes at 2.7% by end '17 More »
Inflation 2.0% for '16, 2.4% in '17 More »
Business spending Slight gain in '17 after flat '16 More »
Energy Crude oil trading from $50 to $55 per barrel in March More »
Housing Single-family starts up 9% in '16, 11% in '17 More »
Retail sales Growing 3.7% in '17 (excluding gas) More »
Trade deficit Widening 4% in '17, matching increase in '16 More »

The government’s employment report for October, which shows a gain of 161,000 jobs, along with upwardly revised August and September totals of 176,000 and 191,000, respectively, bodes well for the economy overall.

The employment gains of the past three months, along with more expected decent job growth this month, will spur the Federal Reserve to pull the trigger at its December meeting on its first quarter-point interest rate hike in a year.

Job growth last month was good in professional and business services, health care and government, but the manufacturing sector posted a small loss — again.

See Also: All Our Economic Outlooks


Look for the job market to tighten next year as demand for skilled workers exceeds their availability. Employment growth in 2017 will average 160,000 jobs per month, down from 180,000 per month in 2016. There will also be a smaller pool of workers to choose from. Many folks who were outside the labor force have already come back in to look for jobs, and those who have not, may not be interested in doing so.

The unemployment rate last month ticked down to 4.9%; it should gradually decline to about 4.6% by the end of 2017, as the labor market continues to constrict. In another sign of the market tightening, wage growth picked up to 2.8% in October.

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Source: Department of Labor, Employment Data