By Roderick Kelly
The US Economic growth trajectory is expected to continue near a 2 percent tortoise pace into 2018, barring any unforeseen shocks, with the manufacturing sector increasing a "little below" that percentage, based on economic data being used by the Federal Reserve Bank of Chicago.
That's not necessarily a bad situation, according to William A. Strauss, senior economist and economic advisor for the Chicago Fed. The moderate growth is occurring around the globe and across all sectors. “Because of that (moderate growth) the risk of recession is reduced," he said at the Valley Industrial Association's 2018 Economic Outlook breakfast.
Other economic points Strauss noted:
The US is in its ninth year of expansion and could break the record of 120 consecutive expansion months.
Employment increased by 2 million jobs over the past 12 months. Of those, manufacturers added 156,000 jobs year over year, which “is not an impressive gain historically.”
Unemployment has fallen to 4.1 percent, with 25 percent of those unemployed have been so for more than six months.
Wages grew by 2.5 percent (nominally) or by about 1 percent when taking inflation into account.
The growth of manufacturing in the US is not expected to come from the automotive sector.
The housing market is slowly coming back and is expected to be back to normal by 2020.
The US economy is expected to expand at trend (2 percent) through 2020.
Light vehicle sales will continue to edge lower through 2018.
Inflation is expected to rise to the Fed’s inflation target next year with the possibility of one more rate hike this year (December) and a projected three more hikes in 2018.
In addition to these, Strauss is "hopeful" that manufacturers and other companies are in an "investment cycle," which can lead to higher productivity and growth.