The American Bankers Association’s Economic Advisory Committee—which is made up of 16 chief economists from some of the nation’s largest banks—today forecast that economic growth will continue through 2020 at an estimated rate of 2 percent. As of July 1, the current economic expansion will be longest in the postwar era.
“Households are in a good place right now, and they are a major stabilizing force for the economy. Sustained consumer spending will keep the expansion on track,” said EAC Chairman Robert Dye, chief economist at Comerica Bank. However, the committee noted that uncertainties regarding trade disputes may affect global and U.S. business confidence. “Concerns about an escalation of trade conflicts, a weakening global economy and the potential for fiscal tightening could lead businesses to pull back on capital investment,” Dye added. As a result of these downside risks, the committee predicted two rate cuts from the Federal Open Market Committee before the end of 2019.
The EAC also said that it expects the national unemployment rate to remain stable at 3.7 percent through 2020 and predicted average hourly earnings growth to be about 3.2 percent through next year. In addition to income growth, the EAC continues to see strong household and business balance sheets, good credit availability and a supportive financial environment.