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UCLA Anderson forecasts a brighter 2014, 2015

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UCLA Anderson forecasts a brighter 2014, 2015

Sustained 3% GDP growth, lower unemployment in our future, report says.

The UCLA Anderson Forecast's outlook for the United States suggests that while growth in the fourth quarter of this year will be dismal, rosier times are ahead for the US economy.

The quarterly forecast, produced by the UCLA Anderson School of Management, indicates that by the second quarter of 2014, US GDP will be growing at a sustained 3%, and that by the end of 2015, unemployment will fall to around 6%.

"That as long as the federal government does no harm, growth in the U.S. economy will be sparked by strength in the housing and automobile sectors, combined with increased business spending and an end to the dramatic drop in federal purchases."

The national economy is "growing despite the self-inflicted wounds caused by the 16-day partial shutdown of the federal government and the botched rollout of the Affordable Care Act's insurance marketplace affecting the giant healthcare sector, which accounts for 18% of the economy."

UCLA Anderson Forecast Senior Economist David Shulman writes that as long as the federal government does no harm, growth in the U.S. economy will be sparked by strength in the housing and automobile sectors, combined with increased business spending and an end to the dramatic drop in federal purchases. Taken together, these factors are expected to put the economy on track to a 3% growth path by midyear 2014 and bring the unemployment rate down to about 6 percent by yearend 2015. Policy interest rates will stay low throughout 2014, but with inflation rising to slightly above 2% (due to rising housing and health care costs, some of it coming from the implementation of ObamaCare), it is expected that the zero interest rate policy of the Fed will come to an end in the spring of 2015.

 

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