Truck News | Rate increases next year could exceed expectations: FTR

11.11.16 | James Menzies, Truck News

The latest forecast from FTR suggests it’ll be more of the same next year for the US economy, growth at a rate of about 2%.

However, Bill Witte, economic expert with FTR, said during a webinar today the growth will be better balanced and not almost entirely driven by the consumer, as it has been of late.

“What I see next year is a little better balance, some growth in business development, some growth in housing, though in both cases growth will be lower than what we saw earlier in the recovery,” Witte said.

He also predicted employment growth will continue, but slow, since the US labor market is close to full employment. But FTR’s most recent economic forecast was compiled before the US election results were in, and Donald Trump was elected president.

“I think that the impact of the election, from an economic point of view, is overall positive, in the sense that prior to the election I didn’t see much upside economically, but now I think there is some,” Witte said.

He noted the US economy could receive a boost from infrastructure spending and tax reform. The risk, however, is continued political deadlock, even if it comes from within the Republican party. He also noted protectionist measures are a concern under Trump.

“I’m hoping that wisdom from Congress will short-circuit any real negative effects there,” he said.

The big risks going into 2017, according to Witte, are: Europe’s sovereign debt issues; China’s widespread debt issues; a weaker US dollar, which could raise inflation; and a stronger US dollar, which could hurt exports.

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