Gross domestic product is seen growing slightly more, while inflation will be tamer, and the forecast for the first rate hike from the Federal Reserve is seen coming later, according to the results of the National Association of Business Economists latest survey.
The December survey sees GDP rising 2.2% this year and 3.1% next year. The forecasters see "nonfarm employment expanding by nearly 220,000 jobs per month next year and the unemployment rate falling to 5.4% by the fourth quarter of 2015. These views are slightly more optimistic than those expressed in NABE's previous Outlook Survey released in September," NABE said in a release.
"Meanwhile, panelists have generally trimmed their forecasts for inflation over the last three months," says NABE Outlook Survey Chair Timothy Gill, deputy chief economist of the National Electrical Manufacturers Association, "in part due to much lower oil price expectations. At the same time, views on the timing and pace of Federal Reserve policy tightening have shifted. Consensus continues to build that a hike in the federal funds rate will take place in the middle of next year, but a plurality of panelists-46%-now believes the increase will occur in the third quarter of 2015 rather than in the second quarter as was expected in September. Likewise, the path of the federal funds rate is expected to be shallower than was predicted in September, reaching only 0.75% by the end of 2015, compared to 0.845% forecast in the previous survey. This forecast is substantially lower than the median FOMC member's latest assessment of the appropriate rate. Similarly, the 10-year Treasury note yield is now forecasted to be 3.2% at the end of 2015, lower than the 3.5% forecasted in September."
