The economic forecast for 2015 looks positive with a return of consumer confidence, job growth and an improved unemployment rate, as well as controlled inflation.
“The consumer’s confidence is back. Basically, the consumer over the recovery has been repairing their own balance sheets, deleveraging on their debts and saving less so all of that spells out more spending moving ahead,” said Ardy Wurtzel, Research Associate at The Federal Reserve Bank of Philadelphia.
The Northeast Berks Chamber of Commerce hosted its annual Federal Reserve 2015 Update during a member breakfast at Kutztown University in the Student Union Building Jan. 16, sponsored by Fleetwood Bank.
“2014 has been its strongest year in the economic recovery in terms of growth for the highest on average (growth) rate and the most recent quarter has been the strongest in over 10 years,” said Wurtzel.
2014 also saw improvements in job growth and the unemployment rate.
“Job growth has been incredible, over 200,000 jobs being added for 11 out of 12 months of the year. The unemployment rate has come down about 1.2 percent from this time a year ago, so huge improvement,” she said.
In December 2014, the U.S. unemployment rate was 5.6 percent and the Pennsylvania unemployment rate was 5.1 percent. The U.S. unemployment rate is expected to drop to between 4.9 and 5.2 percent in 2015 to 2016, according to Wurtzel.
Wurtzel also said inflation is controlled.
Summarizing the economic outlook, her presentation showed that for economic growth, gross domestic product declined in the first quarter of 2014, largely attributed to severe winter weather conditions. Growth rebounded in quarter two to 4.6 percent and in quarter three 5.0 percent. Labor Market showed national job growth being its strongest since the recovery began and unemployment rates continue to decline. Labor force participation has recently leveled off and the number of long-term unemployed remains high. In Monetary Policy Forecasts, the Federal Open Market Committee projects higher growth and lower unemployment “and inflation slowly approaching the Fed’s 2% long-run goal over the next few years”. According to the FOMC from 1.25-1.5% (now) to closer to 2% over 2015, 2016, 2017. and moderately lower inflation over the next few years.
The data comes from the BEA (Bureau of Economic Analysis), the BLS (the Bureau of Labor Statistics), the Census Bureau and the Philadelphia Federal Reserve Bank’s Research department (State Coincident & State Leading Indexes, & the Business Outlook Survey [BOS]).
Correction NoticeThere were errors in the article previously published online and in print. The article has been updated to be correct. Below are the corrections made.
In the quote “2014 has been its strongest year in the economic recovery in terms of growth for the highest on average gross rate and the most recent quarter has been the strongest in over 10 years,” said Wurtzel. The average gross rate should be growth, not gross.
In the second to last paragraph summarizing the economic outlook according to the presentation slide, moderately lower inflation is incorrect. It should read “and inflation slowly approaching the Fed’s 2% long-run goal over the next few years”. According to the FOMC from 1.25-1.5% (now) to closer to 2% over 2015, 2016, 2017.
Also, the data comes from the BEA (Bureau of Economic Analysis), the BLS (the Bureau of Labor Statistics), the Census Bureau and the Philadelphia Federal Reserve Bank’s Research department (State Coincident & State Leading Indexes, & the Business Outlook Survey [BOS]).
We regret the errors. If you see an error, please contact editor Lisa Mitchell at lmitchell@berksmontnews.com.
