Economic Outlook for 2017: More of the Same?
LAS VEGAS — The outlook for the U.S. economy is expansion at a pace around trend through 2019, according to Bill Strauss, senior economist and economic advisor, Federal Reserve Bank of Chicago.
Speaking at Heavy Duty Aftermarket Dialogue ahead of Heavy Duty Aftermarket Week, he said he also expects:
Employment to rise moderately with the unemployment rate remaining very lowThe slack in the economy to disappear, which will lead to a gradually rising inflation rateAn increase in manufacturing output at a rate below trend in 2017 and 2018
Strauss began his presentation by reviewing what he said at HDAD in 2016. He said he was close on three of his four conclusions. But the fourth, manufacturing output, which he previously had expected to grow at a rate slightly below trend in 2016, actually saw no growth. He attributed this to the value of the U.S. dollar, which caused exports to suffer because the cost of U.S. manufactured goods was higher in foreign markets.
Going forward, he said, “I do not know the impact the new administration will have on the economy. There are lots of uncertainties.” He added that the Federal Reserve does not make assumptions when setting its policies but rather relies on data, so the Fed will have to wait to see what changes are made by the new administration before making any moves of its own.
He did say that a group made up of 50 blue chip companies has not altered its outlook on the economy, predicting 2017 to be a little better than 2016 but not substantially better. “However, there is upside risk that economic growth numbers could be higher,” Strauss said.
According to Strauss, the Federal Open Market Committee expects GDP to grow at around trend over the next three years. He is expecting final numbers for 2016 …Read the rest of this story
