Prediction No. 1: Economic growth will accelerate
Though growth has been anemic for the last four years, it is poised to increase, albeit at a rate still below the long-term trend of 3.1 percent. But looking at the Q3 growth rate of 4.1 percent provides insights into the multiple divers of growth in this country.
U.S. consumers are better-positioned to increase spending. Having paid down (or defaulted on) nearly $1 trillion of household debt, U.S. consumers have aggressively improved their balance sheets. With further help from low interest rates, household debt-service burdens are at their lowest level in more than 30 years, according to Federal Reserve data. Household wealth relative to disposable income has surpassed its historical average, according to the Fed, thanks to a pronounced recovery in financial and housing markets. This has given consumers the confidence to spend more of their disposable income, which is growing in line with job creation.
Positive growth sector drivers include the following:
Read more...Five Predictions for 2014 | Institutional Investors content from National Real Estate Investor