ANN ARBOR – America’s economy should grow at its fastest pace in a decade in 2015, and continue that stronger pace of growth into 2016, economists said at a conference in Ann Arbor on Thursday.
That growth could result in more than 5 million jobs created in the United States during those two years, the economists said at the annual economic conference hosted by the University of Michigan Research Seminar in Quantitative Economics.
Daniil Manaenkov, a U-M economist, said that 2015 “will be the year when U.S. economic growth will finally accelerate meaningfully.”
2014 will prove to be a good year, Manaenkov, with the best overall performance in terms of job growth since 2009. But the year got off to a slower start because of the ferocious winter, meaning total growth for the year will be about 2.2 percent.
In 2015, total growth in the nation’s economy should come in at 3.1 percent, Mr. Manaenkov said, and that will improve to 3.3 percent in 2016.
The economy is “more than ready to accelerate,” Manaenkov said. “The housing sector is on a more solid footing, well-positioned for growth. The unemployment rate dipped below 6 percent and is likely to keep falling, nudging higher wage growth. The industrial capacity utilization rate is close to normal, which bodes well for investment.”
Manaenkov forecast national job growth of 2.7 million for 2015. And for 2016, he forecast another 2.6 million jobs. That would mean growth of more than 10 million jobs from 2013 through 2016, which would be the best four-year expansion of jobs since the fabled economic growth period of nearly two decades ago, the biggest burst since 1997 to 2000.
That would also drop the U.S. unemployment rate to an average of 5.4 percent in 2015, and to 5 percent by year’s end in 2016.
In October, the U.S. unemployment rate was 5.8 percent. The U-M forecast may seem conservative to some, with the Harvard Business Review recently repeating its forecast that the national unemployment rate would fall to 5 percent by July 2015.
With more jobs and stable oil prices, Manaenkov forecast strong growth in motor vehicle sales. For 2014, he forecast that 16.3 million cars and light trucks would be sold (up 800,000 from the number sold in 2013) and through October, more than 13.7 million vehicles had been sold.
In 2015, Manaenkov forecast car and truck sales of 16.6 million, with that growing to 17 million in 2016.
Even there, he is more conservative than other forecasts. Earlier this week, the National Auto Dealers Association forecast 2015 sales of 16.9 million and in October, GE Capital forecast 17 million in sales in 2015.
Despite the growth, Manaenkov did not foresee inflation becoming more of a problem. He anticipated that core inflation – which does not count food or energy costs – would stay less than 2 percent through 2016.
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