The near future looks bright economically, according to Ben Ayers, senior economist for Nationwide.
The U.S. economy is experiencing its strongest growth year of the 10-year expansion and that should continue for another one or two years, Ayers said during a webinar Wednesday sponsored by the National Association of Fixed Annuities.
“The second half outlook for 2018 has gotten a little more optimistic” than what was predicted at the beginning of the year, Ayers said. “The only fly in the ointment is potential trade disputes, which add some uncertainty to the economy. If we see more of a trade war, it could add stagnation and a little downside risk.”
However, Ayers said he has very little concern about a recession during the next two years, because the economy is strong on all fronts.
“The labor market is doing well and layoffs are at a near all-time low. Job numbers are slowing a little, but it is because employers are having trouble finding workers. Job growth is widespread across all sectors and wages will eventually follow.”
At the same time, consumer confidence is high—the best it has been since the 1990s, he said. Business, both manufacturing and nonmanufacturing, is feeding off of the consumer confidence and consumer spending, which means inflation will push a little higher.
The Federal Reserve Board has not raised interest rates as quickly as it has in the past, and Ayers predicts it will remain steady with two more rate hikes of 25 basis points this year and four in 2019.
The economist predicted strong equity markets will return for the second half of the year and will remain that way for another couple of years, particularly for international markets, which are behind the United States on the economic growth curve.