We will have our 2014 outlook newsletter finalized shortly. We see Better U.S. Economic Growth ahead in 2014 for the following reasons:
For 2014, we believe growth will outpace the average estimate for U.S. economic growth of 2.5% due to strong consumer spending, an improving jobs market, recovery in corporate spending, strong housing market, revival in the U.S. manufacturing sector, and better conditions for U.S. exports as our trading partners’ economies heal. We also expect the economic drag from tax increases and government spending cuts to be less than expected, particularly after Congress passed the Murray-Ryan budget. Therefore, we expect the U.S. economy to grow in the range of 3% to 3.5% in 2014.
A number of key factors will be critical in order for our upside forecast for GDP to materialize. 1) the Federal Reserve implements the transition in monetary policy slowly, 2) consumer and CEO confidence continues to improve, 3) the U.S. energy revolution adds an economic boost to our economy, 4) the resurgence in U.S. manufacturing continues and 5) the housing market posts solid growth in 2014.
The jobs report released today showed just 74,000 jobs were created in December, well short of economists’ expectations of 205,000. Many economists had increased their prediction recently after a survey from payroll processor ADP suggested businesses added 238,000 jobs. Bad weather was primary factor believed to be the cause for the shortfall. The figure is the lowest monthly report since January of 2011.
The U.S. economy averaged 182,000 job increases per month in 2013, in line with 2012 numbers. For the year 2.18 million jobs were created compared to 2.19 million in 2012.
According to the Labor Department the unemployment rate fell to 6.7% from 7%, the lowest it has been since October 2008. The drop is mostly attributed to the 347,000 Americans who exited the labor force. Over a million people lost their unemployment benefits at the end of 2013, and millions more are set to lose them in 2014.
This publication is provided as a service to our clients and associates of PFA solely for their own use and information. The material is derived from sources believed to be reliable but its accuracy and the opinions based thereon are not guaranteed and have not been verified. The content in this publication is for general information only and not intended to serve as individual investment advice. You should seek independent advice from a professional based on your individual circumstances.