U.S. ECONOMY Business forecasters boost 2-year outlook

Associated Press

WASHINGTON

A business economics group has boosted its outlook for U.S. economic improvement this year and next, particularly for job growth.

The March report from the National Association for Business Economics forecasts more hiring, a lower unemployment rate, a lower inflation rate and more growth in consumer spending in 2015, compared with the group’s forecast December 2014.

The report, released early today, predicts more investment by businesses in equipment and intellectual property, as well as modest growth in stock prices.

“Healthier consumer spending, housing investment and government spending growth are expected to make outsized contributions to the projected acceleration in overall economic activity. Accordingly, recent labor market strength is expected to continue,” John Silvia, the association’s president and the chief economist at Wells Fargo, said.

Other factors driving the improved forecast include an increased pace of activity in the housing sector, the strong dollar and continued low oil prices.

The report predicts the benchmark price for crude oil, which fell from $98 per barrel in December 2013 to $59 in December 2014, will average $61 per barrel at the end of the year and $69 per barrel in December 2016. Just three months ago, the group forecast that oil would spike to $85 per barrel by December 2015.

The NABE report did contain some negatives. Those include a widening U.S. trade deficit in 2015, a 0.1 percent dip in 2015 hourly compensation growth from December’s prediction to 2.5 percent, and scaled-back forecasts for 2015 corporate profit growth, down 2 percentage points to 4.7 percent from December’s forecast.