The U.S. economy will continue to expand through 2017 after a sluggish start to 2016, with growth in 2016 forecast to reach 1.9 percent and growth in 2017 projected at 2.1 percent, the ABA Economic Advisory Committee said today.
The committee of 16 chief economists at some of the nation’s largest banks said that despite global volatility at the outset of 2016, “moderating turbulence from emerging markets and the sustained thrust of American consumers should put the U.S. economy back on course,” said EAC Chairman Carl Tannenbaum, chief economist at Northern Trust.
The EAC said it expects consumer spending growth to slow from last year’s 2.7 percent, but to hold at 2.2-2.4 through 2017. “Fortunately, consumption will keep us going, Tannenbaum said. “Spending has proven resilient through the current expansion.”
Tannenbaum noted that the EAC expects job gains to reach 2.2 million this year. The committee also noted that housing will continue to drive growth as well, with low mortgage rates expected to continue, and a projected 8.5 percent rise in residential investment in 2016 and 4.6 percent the following year.
Committee members also echoed the Federal Reserve’s expectations for gradual rate increases over the next several years as inflation and unemployment allow. Specifically, the EAC expects two rate hikes over the course of 2016 to 0.75 to 1 percent.