What’s on tap for 2019?
On the balance, 2018 has been a good year for American consumers and businesses’ financial health. But what will 2019 hold?
Here’s what economists are saying. U.S. gross domestic product (GDP) growth is expected to rise to 2.5 percent in 2019, down from 3.1 percent forecasted in 2018. These figures were outlined at the Federal Open Market Committee meeting on Sept. 26.
But what about unemployment and jobs? The unemployment rate is expected to drop to 3.5 percent, down from 3.7 percent in 2018. While this data might paint a picture of optimism, experts like former Federal Reserve Chair Janet Yellen offers a few caveats. First, a lot of workers seeking work land part-time jobs, but would prefer full-time engagements. So the figures only tell part of that story. Also, the most growth is enjoyed in the food and retail segments of the economy, which are traditionally lower-paying jobs. So Yellen estimates that the actual unemployment rate may be double what’s reported.
But not all types of jobs are evaluated equally by economists. For example, the state of the manufacturing segment can be a key indicator of the overall health of the U.S. economy. Growth will slow to 2.6 percent in 2019, down from 2.8 percent in 2018.
Housing is another variable economists put under the microscope. Long-term and fixed interest rates are projected to increase in 2019 and beyond. These are important because they determine how easily someone can get a mortgage. The last time the Federal Reserve steadily raised rates was in 2005. This, in part, contributed to the subprime mortgage crisis. And many Americans are still wary of another crisis in the housing market, foreseeing a crash in the next two years.
So what might this mean for businesses? Be on the lookout for a bubble in the stock market, which could signify a slowdown. Economists believe another recession is probably two to three years out. A lot hinges on whether President Trump’s tax cuts will produce jobs. The economy could slow in 2019 as a result of a trade war and the related tariffs.
In the meantime, we are ready and willing to help you finish 2018 strong. Give us a call: (310) 613-1933