Economist and co-founder of West Chester-based Moody’s Economy.com Mark Zandi, a widely cited source of global economic analysis, believes the worst economic news is behind us and 2015 should be even better year for the United States’ economy than was 2014.
Zandi’s end-of-year mostly upbeat economic forecast foresees construction spending and wages inching higher and oil prices continuing to drop.
On the downside, he points to problems in Europe and Asia, specifically China, as potential trouble spots for the United States economy.
The what-to-look-for markers Zandi lays out in his seven-page report published on TheStreet.com include:
- Growth should accelerate in 2015 as higher wages spur more spending, construction and investment.
- The sharp fall in oil prices will slow energy production but still be a net gain for the economy.
- How fast the Federal Reserve raises interest rates, and how markets respond when they do, will be key to the coming year’s economic story.
- As more millennials begin forming households, housing demand and construction will take off.
- The aging population and a slower pace of technological change could weigh on the economy’s long-term potential.
- Problems in Europe and China have the potential to hinder the U.S. expansion in 2015.
Zandi concludes his report with this upbeat prognosis warning investors not to bet against the US economy:
Despite these reasonable concerns, betting against the American economy remains a bad strategy. The U.S. has clearly had a difficult run over the past 15 years, and has been scarred by terrorism, wars and technology and housing bubbles. Lower- and middle-income households have seen living standards decline. But the bad times are likely ending.
Many of the economic wrongs have been righted. Households have deleveraged, the financial system has recapitalized, and U.S. businesses have reduced their cost structures and are highly competitive. Serious problems remain and politics complicate our ability to address them. But if history is any guide, we will.