Central Bank Officials Expect US Economy To Pick Up Steam In New Year
Reuters reported that the New York Federal Reserve has “raised its outlook on U.S. economic growth in final quarter of 2016 and first three months of 2017 to near 2 percent following ‘parameter revisions’ and stronger-than-forecast manufacturing data.” US gross domestic product was on track “to expand at an annualized pace of 1.89 percent in fourth quarter of 2016,” while GDP in the first quarter “was on course to grow by an annualized pace of 1.94 percent,” a more accelerated pace than the previous estimate of 1.7 percent. Meanwhile, Reuters reported the Atlanta Federal Reserve’s GDP Now forecast model also increased its GDP forecast, projecting that the US economy “is on track to grow at a 2.9 percent annualized pace in the fourth quarter,” which “was higher than the 2.5 percent growth rate calculated on Dec. 22.” The forecast of the contribution of inventory investment to fourth-quarter growth “increased to 0.73 percentage points from 0.35 percentage points following the U.S. Census Bureau’s advance economic indicators release on Dec. 29,” the forecast noted. And, Chicago Fed President Charles Evans offered a similar assessment of the economy picking up steam. Bloomberg News reported that Evans said his bank “added expectations for fiscal stimulus into its forecast for the U.S. economy” following the Federal Reserve’s December meeting that included action on interest rates. Chicago forecast 2017 GDP growth of “2 percent to 2.5 percent, Evans said, which is in line with the FOMC’s median estimate of a 2.1 percent expansion.”
What This Means For Small Businesses
Small business owners have long awaited word from top officials that the US economy is indeed gaining strength. News that Federal Reserve officials are increasing their GDP growth forecasts is a positive signal that the overall economy is looking better as 2017 begins.
Reuters also reported on comments from Evans about expected GDP growth.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.