Toggle Navigation
Our Blog
John & Cat
Vacation Rental Compliance
Leased Land
Propositions
What Is Escrow
Appraisals
1031 Exchange
Useful Contacts
Marketing
Our Listings
Our Featured Homes
Recent Sales
Property Search
Palm Springs 500 - 1M
Palm Springs 1M - 2M
Palm Springs 2M - 3M
Palm Springs 3M +
Rancho Mirage 500-1M
Rancho Mirage 1M - 2M
Rancho Mirage 2M - 3M
Rancho Mirage 3M +
Contact Us
Did you know??
Our Blog
Bank Economists Predict Robust Economic Growth in 2015
January 21st, 2015 1:32 PM by Cat Moe
Article posted by RISMedia
2015 will show an economic improvement, according to the Economic Advisory, Committee of the American Bankers Association, who predicts that the U.S. economy will grow nearly 3 percent on an inflation-adjusted basis this year compared to 2.5 percent last year.
The committee, which includes 15 chief economists from among the largest banks in North America, sees an improved fundamental backdrop for growth. Sectors that were severely damaged during the 2008-2009 crisis better health. Household balance sheets have also improved, with strong gains in asset prices and a dramatic drop in debt service burden.
The fiscal and monetary policy environment is supportive of growth. Fiscal policy is no longer a headwind as budget brinkmanship battles abate and tax and spending polices stabilize. The group forecasts the federal budget deficit will stabilize at $470 billion in fiscal year 2015.
The committee expects the Federal Reserve to maintain near-zero interest rates through mid-2015. Thereafter, the bank economists see a very gradual normalization of interest rates over the next several years.
"We expect the Fed to calibrate its policy to minimize any shock to growth," says Ethan Harris, chairman of the group and co-head of global economics research at Bank of America Merrill Lynch.
The group sees failing energy prices as a net positive for the economy. Low prices will hurt the oil patch, cutting into mining employment and capital spending. However, this will likely be more than offset by the boost of energy consumers.
"Gas at about $2 a gallon is like an across-the-board tax cut," says Harris. "Cash savings at the pump leave more money for consumers to save or spend elsewhere."
Despite the weakness in energy sector investment, the group sees business investment as a strong point for the economy. The consensus forecast is that business investment will rise 5 percent on an inflation-adjusted basis this year.
The Committee sees continued monthly job gains of 200,000 or higher through this year. However, the bank economists expressed concerns that job gains had not yet triggered healthy wage growth.
"Top earners have fared well since the last recession, but the same can't be says for middle and lower-income families," says Harris. "Wages have barely kept up with inflation over the last six years, straining household budgets."
Nonetheless, the Committee believes the ongoing drop in unemployment will start pushing wage growth higher.
"Solid job growth, improving wages and lower energy costs should encourage more families to spend," says Harris. The Committee expects 3 percent real consumption growth in 2015.
The group expects residential investment to be stronger this year with gains in single and multi-family starts and home sales. The EAC expects home prices nationally to rise 3.5 percent this year.
"With home prices on the rise, families are once again viewing homes as good investments," says Harris. "Even if mortgage interest rates rise some this year, more people are going to want to buy a first or larger home."
The group's consensus is that mortgage rates will rise only from about 4 percent now to 4.5 percent by year-end.
The group forecasts that consumer credit growth will be modest this year and business lending growth will be stronger, but will return to a more normal pace of growth. In 2015 and 2016, loans to individuals are expected to grow about 6 percent and loans to businesses will grow about 10 percent.
"We're optimistic that business lending will grow at a double-digit rate this year to finance healthy business investment, "says Harris. "Stronger growth in business lending will be critical for the economy. Banks are ready to meet demand as businesses take the next step forward."
The Committee sees low inflation resulting from failing energy prices, which will temporarily push year-over-year headline inflation into negative territory.
"Outside of energy, the improving domestic economy could put upward pressure on prices, but the weak global backdrop and a strong dollar should limit any inflation acceleration," says Harris.
The Committee believes the greatest near-term risks to the U.S. economy come from outside the country.
"Disappointing growth in Europe, China and Japan is a reminder that the global economy still faces major challenges, "says Harris.
The Committee also sees major long-run budget challenges.
"As the baby boom generation retires, the federal budget deficit will balloon again, posing a major challenge to future generations, "says Harris.
Nonetheless, the Committee sees a generally positive U.S. economic outlook for 2015 with above-trend growth, low inflation and a go-slow Fed.
Thought that is was a good article so wanted to post it for our readers. Let us know what your thoughts are on this positive growth! Contact us if you would be interested in getting an home evaluation or speaking to us about purchasing a home.
Posted in:
General
and tagged:
Presidents Premier
Cat Moe and John Nelson
NelsonMoeTeam
Specilizing in over 1 Million Dollar homes
Real Estate
Posted by Cat Moe on January 21st, 2015 1:32 PM
Post a Comment
Subscribe to this blog
Recent Posts:
Disarm them!
Home Energy Assessment
Just Listed! 4929 Herzog Way Palm Springs, CA 92262
Agent Renovation Consultancy - COMPASS CONSULT?
Good morning on this Good Friday:
Things to Inspect Before Selling a Home
8 Real Estate Documents to Keep—and What Happens If You Don’t
If You’re Considering Selling, ACT NOW!!
The BEST Restaurants in Palm Springs
Looking to Move-Up to a Luxury Home? Now’s the Time!
Archives:
February 2010
New IRS guidelines for home buyers tax credit
Financing for Canadians is back !!!
$8000 Incentive extended till April 2010 - And NOT just first-time buyers
October 2016
Coldwell Banker Closes Three Landmark Properties in the Desert
July 2016
This $2 Million Home Was Built to Look Like a Ship
June 2016
Palm Springs's Iconic Elrod House, a John Lautner Gem, Asks $8M Famous for appearing in Diamonds are Forever, the concrete masterpiece returns to the market
March 2016
Stock market swoon stalls luxury home sales
December 2015
2015 Survey Exclusive: Wealth, Real Estate & the High-Net-Worth Investor
April 2015
Housing Data Shows Surge in Demand, Median List Prices
February 2015
Staging for Winter Home Sales
Will Shrinking Inventories Price Out New Buyers in California?
January 2015
Bank Economists Predict Robust Economic Growth in 2015
December 2014
U.S. House Prices Contribute to Global House Price Recovery
November 2014
Should I Sell My Home Now or Wait Until the Spring?
October 2014
Don't Wait! Move Up to the Home You Always Wanted
September 2014
5 Questions You Should Ask Your Real Estate Agent
July 2014
Is an Agent Team Right for You? 9 Signs That Point to ‘Yes!’
June 2014
Housing Market Sees Improvements in April
May 2014
Tips For Buying Luxury Real Estate
April 2014
Technology can’t do real estate the way agents, brokers and loan officers do: Focus on the human connection
New blog page...content coming SOON
January 2012
Diane Keaton to be at Desert Spanish Weekend
Unemployment rates drop again. Great news for everyone !!!
Desert Spanish Weekend March 23rd-25th
How I brought in the New Year
December 2011
Do people really buy houses for Christmas?
New Construction is happening again !!
Christmas Parade & new beginning for Moe Real Estate Investments
November 2011
$10.1M Grant for new Palm Springs Bridge over Araby Road
October 2016 (1)
July 2016 (1)
June 2016 (1)
March 2016 (1)
December 2015 (1)
April 2015 (1)
February 2015 (2)
January 2015 (1)
December 2014 (1)
November 2014 (1)
October 2014 (1)
September 2014 (1)
July 2014 (1)
June 2014 (1)
May 2014 (1)
April 2014 (2)
January 2012 (4)
December 2011 (3)
November 2011 (1)
February 2010 (3)
Categories:
General (37)
Industry News (1)
My Favorite Blogs:
Sites That Link to This Blog:
×
Close
Add a new blog comment
*
Name:
*
Email Address:
URL:
*
Comment:
Characters from the image above:
Your entry does not match the image, please try again.
Submit Comment
×
Close
Subscribe To My Blog
*
Name:
*
Email Address:
Address:
City:
State:
Zip:
*
Characters from the image above:
Your entry does not match the image, please try again.
Subscribe