PNC Bank Senior Economist: Economy Is “Solid”
PNC Senior Economist Augustine Faucher says 2015 is on solid footing and is optimistic about the year ahead, much as he predicted in 2014. Parts of his forecast:
- Housing starts back up to 1 million, ticking up to 1.25M, but far less than the 2M in 2005-06.
- Auto Sales back up to 16-17M a year
- Economy has regained 9M jobs lost during the recession and adding 250k jobs a month.
- Unemployment has dropped to 5.5% and will continue to fall
- Mortgage rates headed up temporarily, but have receded. Rates will rise, but “a very, very gradual process”
“Headwinds” include trade, energy, economies and conflicts. And, wage growth will accelerate as employers (Wal-Mart, etc.) are facing pressure to pay more to retain workers, increasing the “quit rate” that employees have the confidence to leave for other jobs if not paid enough.