MADISON, Wis. – Increases in housing construction and rising oil prices will drive higher economic growth higher next year, while auto sales should remain robust, according to CUNA Mutual’s chief economist.
Steven Rick said credit unions next year can expect a “slight acceleration” in the economy with no signs of a recession until late 2018—good news for CUs looking to expand their reach and services, he said.
Rick is further predicting the Fed will boost rates once this year and three times in 2017.
“We’re forecasting a modest acceleration in economic growth to 2.4% in 2017 from this year’s very slow 1.6%,” Rick told attendees of CUNA Mutual Group’s seventh annual Discovery Conference.
“An inventory correction, reduced energy sector investment due to falling oil prices, and the negative impact of the rising dollar on our exports all contributed to the U.S. economy’s slower growth rate. These factors will start to fade in 2017, resulting in a growth rate slightly above the target 2% mark,” he said.
According to Rick, additional factors helping fuel economic growth include an acceleration in housing construction due to a shortage of available homes for sale; an increase of 3% in average hourly earnings in 2017; and an increase in oil prices. Those factors coupled with continued low interest rates will result in increased spending, he said. Savings and lending growth at credit unions will be a direct result of rising economic confidence, Rick added.
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