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Better times ahead for economy?

By Mark Hamrick · Bankrate.com
Thursday, January 16, 2014
Posted: 4 pm ET

Some of the nation's top economists say this year should bring the strongest growth for the U.S. since the financial crisis. That could translate to a modest increase in interest rates for consumers.

In a news conference held this morning by the American Bankers Association, its advisory committee said growth should average 3 percent this year in the U.S. "We see 2014 as something of a break-out year," said Christopher Low, chief economist for FTN Financial. "We had to go back to the files to find the last time we had a 3 percent growth forecast." As it turns out, it was in 2005.

The group says modest improvement should take place in most areas of the economy, anchored in housing.

Faster job growth should also be part of the equation. While employers added an average of more than 180,000 jobs a month in 2013, the bank economists look for that number to rise to 214,000 by the end of 2014. They also see the unemployment rate slipping to 6.4 in the final quarter of this year.

Low said the economy could actually be even stronger than the group expects.

One helpful change to the growth environment includes a slight increase in government spending this year, with a federal budget expected to be in place. Low noted the comparison to the decline in government spending seen in recent years, including at the state and local level. Business investments are also picking up.

Overall, the group's chief economic worries are focused overseas with the global economy, including the fragile recovery in Europe and the tightening of credit in China.

For interest rate watchers, the panel expects a slight increase in the yields of U.S. Treasury notes and bonds through the end of this year. It also expects the average for 30-year fixed mortgage rates to hit 5 percent in the final quarter of this year, up about half of 1 percent from where they have been recently. As the economy improves, credit should become more available to business and consumers over the next six months.

Do you share the economists' optimism? What would you do differently if the economy were to improve this year?

Follow me on Twitter: @Hamrickisms. 

 

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11 Comments
Sarah
January 21, 2014 at 11:08 am

Has it yet?

Bill
January 21, 2014 at 10:07 am

Our Federal Government does more harm that good when it sticks its nose into business affairs(and other country affairs). They want control, control, soon we will looks like other socialistic countries. Take from the ones who earn and give to those that don't. " I love government answers when something wrong happens. I didn't know?/ I wasn't aware, It was just a bunch of Rebels. When you feed, house, cloth,give medical care and give cell phones to those that can work, but won't, how can you lose. Let industry/business create jobs and eliminate welfare for those that can work.

S
January 21, 2014 at 9:06 am

I keep reading that the recession is over. I've got news for the morons writing these articles - it is NOT! The levels of unemployment and underemployment are staggering. A prime example of the underemployment problem is the minimum wage debate involving McDonald's and other fast food franchises as well as low paying retailers. When I was a student, I worked fast food jobs which, at the time, were ONLY filled with other students working for "walking around money" other than the managers. No one would ever have considered these entry level jobs for supporting themselves, let alone a family unless they hoped to move into management (very few). Even most of the managers had no intention of sticking around until retirement.

George
January 21, 2014 at 9:06 am

As far as I'm concerned we are still in a recession. Price of gasoline has remained the same or has gone up from a year ago. The cost of food is going up. Heating and oil prices to heat your home has risen from a year ago. New Bills are popping up to from my city as it is creating new ways of billing (water/sewage runoff). The job market is basically the same (no real increase) and for a lot of people finding a job is harder than ever before. Taxes are being raised both local and federal. Finally, Insurance rates are going up due to OBAMACARE which is a train wreck.

So how is 2014 going to be a banner year? I don't see it happening. If anything, the retail markets are going to take a big hit because people will not have the income to spend as much money. The housing market will most likely stay the same maybe decrease because (again) people will wan't to save their money (same as banks refuse to loan money). This country continues to be forever divided between the have's and have nots. I continue to hear the Democrats saying what plans do the Rublicans have to make things better? Well, I ask the same from them. What plans do the Democrats have? I don't hear any plans at all except to tax, tax and tax some more. That is not the way to increase jobs or increase pay wages (don't get me started on the fight to increase minimum wage either, that's not going to save anybody).

When you have two parties that won't listen to each other and claim the other party are Extremists (Harry Reid quote) then all I see is more of the same. When you have a President cry about not being liked because of his skin color (approval rating sinking faster than the Titanic) then all you have there is a Racists/paranoid President. How about not lying, covering up scandals, being accountable, not firing anybody when they cheat the people, and perhaps your poll numbers wouldn't sink?

This President does not lead. He allows the Democrats and Republicans to fight all day long and ZERO gets accomplished. They do not like each other and will not listen to the other side. Any proposal/solution is for the benefit of a party NOT what's best for the Country. That is not governing... they took an oath to do what's BEST for the PEOPLE of the United States. Instead, they let the power go to their heads and only offer solutions that will best benefit their respective party. Whatever happened to the word COMPROMISE? Has that word been taken out of the Dictionary?

Cynthia Robinson
January 21, 2014 at 4:19 am

In my area there so many people out of work and you can look everywhere and see foreclosed homes. I am angry that our government has continued to hurt the people here.I think we need to lock down imports and exports. If we cannot make it , then we do without. We need to UNDO NAFTA!How long are we going to blame it on a rep. or dem...it's the whole gov. Lets take back our country! why are we spending to help hunry people in other countrys when there are so many now that are starving and in a box for shelter?why do we stick our nose everywhere when other countries don't ? We are going to get our nose knocked off if we keep it up. Look how much money we'd save keeping our nose cleaner. That's my two cents worth and I'm sticking to it!

rudy cohen
January 21, 2014 at 12:06 am

The easiest fix to the US economy is to force the return of the
THREE TRILLION DOLLARS being held illegally offshore.The US can
simply decree (or legislate) that foreign financial entities can
no longer hold untaxed US financial instruments.Right now Swiss
Banks are quietly disclosing to the US govt. details on and about
the untaxed numbered accounts on their books. THREE TRILLION
DOLLARS pumped back into the US ecomony would fix every economic
ailment.Congressional Republicans would resist this fix because
the political benefits would redound to the Dems favor and also
to the Presidents.

Doug
January 20, 2014 at 11:04 pm

How in the world can any intelligent human being see our economy to grow with our present administration & congress. A numbers game is being played in this country with no real employment growing while unemployment grows even though the numbers game says it is getting better.
Obamacare will not help the economy, but may well destroy the ability of the present purchasers to begin to purchase less.
I see at best the economy will remain as is, but could take a real down turn as there is no stability in our markets as we continue to take care of foreign business along with taxing our citizens even more.

ironmike
January 20, 2014 at 8:49 pm

I was wondering if anyone can help me it seems my browser has gone back in time and I'm looking at this page from 2009/2010/2011/2012

Jerry
January 20, 2014 at 5:48 pm

I too have an economic background. Unfortunately, I see things a bit differently in 2014. I see growth reaching 2% at best. 2013 was marked by an abundance of governmental bond purchasing programs which artificially raised the stock market. Growth in part for 2013 was made up of pent up demand for many goods and services along with reduced profit margins for retailers having to sell discretionary purchase items at lower costs due to lower net incomes. Obamacare along with higher local property taxes(struggling municipalities and pension shortfalls)combined with high unemployment rates will continue to drag on net incomes. Interest rates will increase very mildly over the next year as housing will remain very sluggish. If things were going to improve dramatically, the Fed would have pulled back more on their bond purchases. Stand offs on budget issues in Washington will intensify over the next year, with little outcome or benefit for the American people. In my opinion, it would be wise to take some money off the table with the stock market starting in August. However, another delay in the implementation of Obamacare could lift the market instead, although I feel that is unlikely at this point. It will be all number/sign up driven. Look for gasoline prices to continue to rise especially after BP settles it's claims in court later this year. Don't believe everything you read, the economy is still in a fragile state. Until the US debt and unemployment are addressed fully, there will always be growing concerns i

Edward
January 20, 2014 at 4:46 pm

The way our government is spending money now, things will get worse. They are too busy dealing with other countries with trade, moving legitimate American businesses to foreign countries, and over budgeting, that they can't take care of things right here in the US. All they want is to suck the taxpayers money up, and put it in their pockets. That's just determined by our national debt, which is in the billions. Why don't they just take care of home? The USA would be a better place.

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