Economists see steady growth but remain mixed on their outlook for the health of different segments of the U.S. economy.
Investments by businesses and government, as well as international trade activity, will grow at a faster rate than previously forecast, according to a survey released Monday by the National Association for Business Economics. However, consumer spending and investments in homes will be lower than previously predicted because of Americans’ lagging wage growth and trouble obtaining loans.
The predictions come in a quarterly survey of 46 forecasters that was conducted between Aug. 25 and Sept. 9.
After an unusually high degree of volatility in the first half of the year, the group expects the pace of economic growth to steady, with gross domestic production forecast to grow at a seasonally adjusted annualized rate of 3 percent in the third and fourth quarters of 2014 and throughout 2015.
Other predictions include:
- An average monthly gain of 228,000 nonfarm jobs in 2014, up from a forecast of 209,000 in the association’s last survey in June. Next year, the pace of job growth could slow to 211,000 a month.
- Workers’ pay could also increase, with salaries estimated to grow 2.8 percent in 2014, up from the 2 percent prediction in June. For 2015, wages are now forecast to grow 2.6 percent.
- Industrial production should continue to pick up from the 2.9 percent growth recording in 2013. The economics now estimate that it will be 4 percent for this year and 3.6 percent for next year.
- New home construction, however, won’t be as rosy. Last year saw an 11.9 percent increase in new home construction. Back in March, the economists were predicting 9 percent growth this year. By June, that was down to 3.8 percent and now stands at a paltry 2.7 percent increase. The economists think it will rebound next year to 9.2 percent growth.
- Predictions for home price growth remain unchanged at 5 percent this year and 4 percent next year.
- Nearly two-thirds of the economists surveyed say the biggest challenge to the housing market is the inability of prospective buyers to qualify for a mortgage. One quarter said the decline was caused by Americans today preferring to rent rather than own.