The Economy

Posted on December 30, 2014 by The Weekly Commentary

“Calculated Risk,” a well-known financial blog, offers up the following 10 economic questions for 2015:

1) Economic growth: Even with contraction in Q1, 2014 was a decent year (GDP will grow around 2.4% in 2014). Will 2015 be the best year of the recovery so far?

2) Employment: With one month to go, 2014 is already the best year for employment growth since the ’90s. Will 2015 be as strong?

3) Unemployment Rate: The unemployment rate was at 5.8% in November, down 1.2 percentage points year-over-year. What will the unemployment rate be in December 2014?

4) Inflation: The inflation rate is still running well below the Fed’s 2% target. Will too much inflation be a concern in 2015?

5) Monetary Policy: The Fed completed QE3 in 2014, and now the question is will the Fed raise rates in 2015?

6) Real Wage Growth: Will real wages increase in 2015?

7) Oil Prices: Declining oil prices and falling bond yields were two of the biggest stories of 2014. Will oil prices continue to decline in 2015?

8) Residential Investment: Residential investment (RI) picked was up solidly in 2012 and 2013 – up 13.5% and 11.9% respectively – but RI was only up 1.6% through Q3 2014. Note: RI is mostly investment in new single family structures, multifamily structures, home improvement and commissions on existing home sales. How much will RI increase in 2015?

9) House Prices: It appears house prices will be up about 5% or so in 2014 (after increasing about 12% nationally in 2013). What will happen with house prices in 2015?

10) Housing Inventory: It appears housing inventory bottomed in early 2013. Will inventory increase further in 2015, and, if so, by how much?

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