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Forecasters Dial Back US Growth Outlook for 2016

  • VOA News

A roofer works on a home under construction in the Briar Chapel community in Chapel Hill, N.C., June 9, 2015.

A roofer works on a home under construction in the Briar Chapel community in Chapel Hill, N.C., June 9, 2015.

Forecasters say the U.S. economy will grow a bit more slowly than first thought next year, but they also say the outlook for jobs and the housing market is good.

Members of the National Association for Business Economics predicted this week that U.S. economic growth would be a modest 2.2 percent for 2015 and speed up a little next year. NABE economists help run all kinds of companies across the United States.

NABE member Ken Simonson said the growth figures were a "modest" decrease from earlier predictions. But he said "nevertheless it is growth, it is going to stay positive for every quarter through the end of 2016, and jobs are going to keep being added every quarter."

NABE forecast that the world's largest economy would continue growing at an annual pace of between 2 and 2.5 percent over the next five years. The prediction of "lackluster" growth was based on what the economists saw as "tepid" business investment, along with a lot of regulatory and other constraints.

Nearly all of these economists said they expected the U.S. central bank to begin raising the key interest rate next week, and that it would rise gradually to a still-low rate of just over 1.1 percent by the end of next year.

Next year, they also said they expected a slight increase in homebuilding and an uptick in the number of jobs created each month.

A separate study by the Manpower employment services company questioned 11,000 employers across the United States and found one in five planned to hire people next year, while just over one in 20 planned to cut jobs. The authors were optimistic about employment growth next year, despite problems in the energy sector and manufacturing and weakening exports due to the strong dollar and weak growth in overseas economies.

A company that tracks the housing market said interest rates would rise gradually in 2016, but not enough to keep home sales and prices from also rising. CoreLogic said an improving job market would make it possible for more people to set up households and start families, boosting demand for homes.

The researchers also reported a sharp drop in the number of foreclosures over the past year, a sign that more of the damage from the financial crisis is healing.

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