December 2014 NABE Outlook
The December 2014 NABE Outlook presents the consensus of macroeconomic forecasts from a panel of 48 professional forecasters (see last page for listing). The survey, covering the outlook for 2014 and 2015, was conducted November 4-17, 2014. The NABE Outlook Survey originated in 1965 and is one of three surveys conducted by NABE; the others are the NABE Business Conditions Survey and the NABE Economic Policy Survey. Founded in 1959, the National Association for Business Economics is the professional association for those who use economics in their work. NABE has over 2,500 members and 41 chapters nationwide. Timothy Gill, National Electrical Manufacturers Association (chair); Robert Kleinhenz, Los Angeles County Economic Development Corporation; Tim Mullaly, FedEx Corporation; Arun Raha, Eaton Corporation; Ken Simonson, Associated General Contractors of America; and Richard Wobbekind, Leeds School of Business, University of Colorado at Boulder, conducted the analysis of survey responses for this report. The views expressed in this report are those of the panelists and do not necessarily represent the views of their affiliated companies or institutions. This report may be reproduced in whole or in part with appropriate citation to NABE.
SUMMARY: “Economists participating in NABE’s December 2014 Outlook Survey expect economic growth to accelerate in 2015,” according to NABE President John Silvia, chief economist of Wells Fargo. “The NABE panelists’ median forecast is for real GDP growth to measure 3.1% on an annual average basis next year, a marked improvement from the 2.2% growth rate currently expected for 2014. On a Q4/Q4 basis, the panel’s median forecast is for real GDP to climb 2.2% in 2014 and 2.9% in 2015. The Outlook Survey panelists anticipate the solid pace of output growth will be accompanied by continued labor market firming, with nonfarm employment expanding by nearly 220,000 jobs per month next year and the unemployment rate falling to 5.4% by the fourth quarter of 2015. These views are slightly more optimistic than those expressed in NABE’s previous Outlook Survey released in September.”
“Meanwhile, panelists have generally trimmed their forecasts for inflation over the last three months,” says NABE Outlook Survey Chair Timothy Gill, deputy chief economist of the National Electrical Manufacturers Association, “in part due to much lower oil price expectations. At the same time, views on the timing and pace of Federal Reserve policy tightening have shifted. Consensus continues to build that a hike in the federal funds rate will take place in the middle of next year, but a plurality of panelists—46%—now believes the increase will occur in the third quarter of 2015 rather than in the second quarter as was expected in September. Likewise, the path of the federal funds rate is expected to be shallower than was predicted in September, reaching only 0.75% by the end of 2015, compared to 0.845% forecast in the previous survey. This forecast is substantially lower than the median FOMC member's latest assessment of the appropriate rate. Similarly, the 10-year Treasury note yield is now forecasted to be 3.2% at the end of 2015, lower than the 3.5% forecasted in September.”
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