DETROIT – At

the halfway point in 2015 Comerica Bank Economists see reasons to expect solid

U.S. economic growth through the second half of the year. U.S. data at the end

of the second quarter are encouraging. There is ample evidence of a pickup in

economic momentum through the second quarter, after a weak first.

Job growth

remains strong. In June, 223,000 jobs were added to the U.S. economy and the

unemployment rate dropped to 5.3 percent. House prices are going up. Household

balance sheets are improving. Consumer spending is picking-up. The two-thirds

of the economy comprised of consumer spending has a strengthening base.

The even better

news is that economic momentum looks like it will carry over into the

just-begun third quarter. Government spending looks like it will firm up as the

limits of the federal spending sequester ease going forward, and strengthening

tax revenue supports states and municipalities. Business investment slumped in

Q1 but that too will improve as businesses respond to an improving domestic

economy.

That

gurgling sound you hear is the world awash in oil. U.S. production is still

increasing, even though the drilling rig count is less now than half of what it

was this time last year. U.S. inventories of crude oil are still historically

high. Petroleum consumption is ticking up, but only marginally. Global

production and storage are also at peak levels. We have revised down our

expectations for WTI oil prices at the end of this year to $60 per barrel. This

will keep gasoline prices low, adding to consumer confidence.

We still

expect the Federal Reserve to begin raising the fed funds rate in September.

Their mandate rests squarely on the U.S. economy, which is showing improved

performance at mid-year. However, financial market turmoil in Europe could

give the Fed cause to pause. We don’t think that will happen. But the potential

for financial market volatility in Europe will cause the Fed to keep their

cards close to their vest over the next few weeks. Until a near-term path is

established for Greece and the rest of the European Union, the Fed keeps its

options open.