Ten Economic Questions for 2015 by Bill McBride on 12/24/2014 03:01:00 PM Here is a review of the Ten Economic Questions for 2014. There are always many questions for the new year. There are international economic issues with Russia in recession, Europe struggling and China slowing. There are always problems in the middle east, North Korea, and in other regions. In the U.S., this is an odd year (no election), and Congress might threaten the economy again. And something might surprise us again (did anyone see yields dropping this far in 2014?). Here are my ten questions for 2015. Ill follow up with some thoughts on each of these questions. 1) Economic growth: Heading into 2015, most analysts are pretty sanguine. Even with contraction in Q1, 2014 was a decent year (GDP will grow around 2.4% in 2014). Will 2015 be the best year of the recovery so far? Could 2015 be the best year since the 90s? Or will 2015 disappoint again? 2) Employment: With one month to go, 2014 is already the best year for employment growth since the 90s. Will 2015 be as strong? Or will job creation slow in 2015? 3) Unemployment Rate: The unemployment rate was at 5.8% in November, down 1.2 percentage points year-over-year. Currently the FOMC is forecasting the unemployment rate will be in the 5.2% to 5.3% range next December. What will the unemployment rate be in December 2014? 4) Inflation: The inflation rate is still running well below the Feds 2% target. Will the core inflation rate rise in 2015? Will too much inflation be a concern in 2015? 5) Monetary Policy: The Fed completed QE3 in 2014, and now the question is will the Fed raise rates in 2015? If so, when? And by how much? The Fed Funds rate has been at 0 to 0.25% since December 2008. 6) Real Wage Growth: Last month I listed a few economic words of the year for the last decade. I finished with: 2015: Wages (Just being hopeful - maybe 2015 will be the year that real wages start to...
Posted on: Fri, 26 Dec 2014 22:15:05 +0000
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