The nation’s financial executives are the latest group to predict even better times to come for the U.S. economy. In a new membership poll being released Tuesday, the industry’s trade group says it sees growing payrolls, solid growth and continued low inflation in 2015.
The annual survey by the Association for Financial Professionals Inc. joins a growing number of forecasts which see the U.S. economic recovery solidifying next year, along with the first real pressure on employers to increase hiring and raise wages since the start of the Great Recession six years ago.
The financial planners group is projecting gross domestic product growth of 2.7 percent in 2015, slightly ahead of the pace for 2014. This year’s number were hurt by an unexpected slowdown in the first quarter largely blamed on a brutal winter snap. Cautious companies that have been sitting on large piles of cash are expected to finally loosen the purse strings as they invest and expand.
“We have been tracking cash accumulation, which slowed this year as companies began to invest in the future,” said AFP President and CEO Jim Kaitz, in a statement accompanying the report. “Now the big news is that almost half of companies plan to expand payrolls in 2015.”
The U.S. jobless rate remained at 5.8 percent in November, the Labor Department reported on Friday, though the economy added some 321,000 jobs — far more than economists had been expecting. But many workers are still unable to find full-time work, and the labor participation rate suggests a high number of the long-term unemployed have dropped out of the job market altogether.
According to its poll of some 856 corporate financial executives, the AFP foresees the nonfarm economy adding 1.9 million next year, an average of nearly 160,000 a month, with just under half of the companies polled planning to add workers in 2015. Consumer prices will rise by 1.6 percent — below the 2 percent benchmark that the Federal Reserve has cited as a potential trigger for higher interest rates. But many corporate financial professionals still expect the Fed to tighten short-term interest rates, which have been near zero since the global downturn in 2008, sometime in 2015.
With growth slowing in China and Japan and Europe teetering on the edge of a new recession, a majority of respondents expect the dollar to appreciate against both the euro and the yen next year.
The big wild card for the economy is political: The prospect that a Democratic president and a new Republican-dominated Congress will fail to achieve much on taxes, trade and regulation could temper the economy’s performance, the AFP survey said.
In total, 55 percent of those polled believe business conditions will improve in 2015, compared to just 11 percent who expect things to get worse.
Separately, the economists and policymakers at the National Association for Business Economics also see bullish times ahead, predicting that stronger growth and falling energy prices should push the U.S. economy to its fastest growth in a decade.
The NABE said in its forecast released Monday that the economy should expand by 3.1 percent next year, the best performance since 2005, when the economy grew 3.3 percent.
The 2007-2009 recession was the worst downturn since the 1930s, and the economy has struggled to regain its footing. The U.S. has been stuck with subpar growth averaging 2.2 percent per year. The NABE forecasters believe growth this year will average an anemic 2.2 percent, matching last year’s performance.
But the NABE forecasting panel, composed of 48 economists, pushed back their expectation for the first hike in the Fed’s key short-term interest rate, which has been near zero for six years. Now, 46 percent of the NABE panelists think the first Fed rate hike won’t happen until the July-September quarter next year, up from 26 percent who targeted that period before.
• This article was based in part on wire service reports.
• David R. Sands can be reached at dsands@washingtontimes.com.
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