Economists say we’ll have a happy – really happy – New Year.
It’s New Year’s day, so it’s time for football, hangovers, resolutions and predictions.
The first three are your own. But for prediction, we have economists to help. They get paid to peer into the future, and generally, because of the optimistic business cycle, they see the good times ahead.
“This phase will continue to grow steadily in 2018,” said Nariman Behravesh, chief economist at IHS Markit in his annual forecast. “While economic risks remain, much of it is a low-level threat to the overall situation in 2018.”
Most mainstream economists and stock market analysts agree. Here are some typical comments from experts:
Lewis Alexander, chief us economist at nomura, said: “strong economic growth is helping to push the economy closer to or even beyond full employment. “Overall, we expect the us economy to continue to beat expectations.”
Independent consultant union (Independent Advisor Alliance), chief investment officer Chris tied card reilly (Chris Zaccarelli) wrote: “I expect next year, standard & poor’s 500 index (including dividends) will reach double digits, and the rate of return on corporate earnings will continue to improve.
John Lynch, chief investment strategist at LPL Financial, said: “we are forecasting a return of 8-10 per cent for the s&p 500 in 2018. “The s&p 500 can generate strong returns.”
You get the picture: it’s beautiful.
The key reason for this optimism is growth around the world. After the outbreak of the global financial crisis in 2008, it took a long time for many parts of the world to rebound. Has been hard hit by the recession, for example, Europe rebound in 2017, a 2.2% increase in 2018, thanks to the falling unemployment, is advantageous to the export competitive euro and favorable policy background “, Behravesh said.
When europeans are in better financial shape, they buy more American goods and services. Emerging markets are emerging, too. In the New Year, he predicts, the global economy will grow by 3.2%.
In addition to the global economy continues to grow, economists often refer to these factors in the optimistic prospect: low inflation, low interest rates, the unemployment rate is low, tax cuts, depressing demand for housing, productivity growth and consumer confidence.
For Behravesh, this is the bottom line: “the risk of a recession is still very low.”
Is there a cloud in the sky? If there is one thing that stops analysts, it is that wage growth remains slow. Consumer attitudes rose, but income growth continued to be subdued.
Lindsey Piegza, chief economist at Stifel Fixed Income, said: “if wages don’t continue to improve, consumers will struggle to maintain their current modest consumption.
So boss: if you want to have a good time, you may want to start a New Year by giving your workers a raise.