Forecast Reveals Bright Future04.19.2017
CUNA economists recently gazed into our crystal ball—and the future looks bright.
Our newly minted outlook is a bit more upbeat than our previous forecast, reflected in a modest increase in economic growth prospects for the year and, by extension, faster credit union loan growth and higher credit union earnings than previously advertised.
We now expect the U.S. economy to grow 2.5% in 2017, a modest nudge up from the 2.4% advance previously forecasted.
A booming stock market, buoyed by expectations of substantial fiscal stimulus later this year, has the Conference Board’s consumer confidence index bumping along near a 15-year high.
Our baseline forecast projects robust domestic demand in both the household and business sectors, boosting growth during the year.
If the Trump administration’s promises of massive tax cuts and big increases in government spending on infrastructure materialize, those steps will almost certainly boost economic growth. But the effects will be seen later in the new president’s term.
The big downside risk to this outlook is the potential for a trade war should the new administration take an aggressive anti-free-trade stance. But we think it likely that election-year rhetoric will be softened by more careful consideration of this big downside risk.