Moderate optimism of US economic forecast: unemployment, GDP and inflation
In the United States in January 2019, 312,000 new jobs appeared. At the same time, the unemployment rate at the end of 2018 increased to 3.9%. Analysts believe that by the end of 2019 this figure will not exceed 3.7%.
Real GDP will decline, but not critical. From 2.9%, it will drop to 2.7. In 2020, the figure will decrease slightly and will be 2.1%.
Core inflation will rise to 2.4 from 2.2%. However, the prerequisites for slowing economic growth are visible. In particular, this increase in interest rates and possible economic confrontations with other countries.
US economic forecast: will there be the salary increase?
The average salary exceeds the same indicator last year by 3.2%. In January 2019, an increase of 11 cents was seen in comparison with December 2018. But progress may slow down. In a recent survey conducted by employees of the National Federation of Independent Business, 25% of employers from small and medium businesses are planning to increase compensation for new employees. In their opinion, this will lead to the filling of open positions. In 219 states and the District of Columbia in 2019, the minimum wage will slightly increase. This was made possible by the adoption of new laws.
With low unemployment, employees can count on decent wages. In the event that they do not receive the desired compensation, it makes sense for them to change the employer. It is true; this is often associated with the move.
It is also specific that more workers appear on the labor market. This contributes to the growth of wages. Hiring can be about 200,000 employees per month.
Interest rate increase
Earlier it was noted that raising interest rates would slow the economy.
However, this will be able to contain inflation. Analysts say that growth is likely to take place once or twice in 2019. This will result in a similar increasing credit card and car loan rates. An increasing number of people will notice that living in debt is unprofitable. It can reduce the appetites of the population – from SUVs to modest small cars.
Beginning of 2019 – it is time to pay off credit card debts.
With regard to mortgage loans, there is no single forecast: the market is volatile and individual in each state. However, it is believed that the mortgage rate for 30 years will exceed 5.25%, and then fall sharply.
Corporate debt and large companies
Low interest rates have led firms to take out easily corporate loans. But it is possible that rates will rise. Most high-tech companies are revising their projected profits – including due to trade wars with China. Silicon Valley companies are also expected to come under close attention from the US government in terms of possible violations of antitrust laws. This is unlikely to have a positive impact on the economic situation.
