5 Key Economic Trends for 2015
From the Desk of Jim Eccleston at Eccleston Law Offices:
According to the forecast from the SIFMA’s Economic Advisory Roundtable, 2015 looks to be a continuation of the positive trends of 2014. The major economic indicators – inflation, unemployment, consumer spending and the price of oil –all have gone in positive directions this year.
1. The economy
The GDP number for 2015may not seem huge but SIFMA notes that it would be the largest economic growth in a decade. Continued employment gains, firming wages and somewhat less restrictive policy will all help. Still, the bar is low as the economy tries to raise itself clear of the recession.
2. Monetary policy
The Fed has kept the federal funds rate low for years. For 2015, SIFMA expects the rate to be at 0.25 percent or lower through midyear. It also forecasts that the Federal Open Markets Committee will begin shrinking the Fed’s balance sheet by curtailing reinvestment of proceeds from asset holdings in the first quarter of 2016.
3. Unemployment
Unemployment has been falling and that’s a good thing in general, although how many people are underemployed and how many have stopped looking for jobs still are unclear. Still, SIFMA sees the jobless rate falling to 5.4 percent by the end of 2015.
4. Inflation & Spending
The low climb in consumer prices is forecast to continue in 2015. The SIFMA sees a 1.3% rise in the personal consumption chain price index.
5. Oil Prices
SIFMA believes that lower oil prices are due to oversupply and not because of lack demand, which means the effects are transitory. The steep decline in oil prices is expected to help the economy if the trend continues. The chances of the price staying below $85 per barrel in 2015 are put at 60%.
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