1/1/2014 9:22:00 AM
NEWS BRIEFS
ITR Economics: Positive Signs for U.S. Economy in 2014
The U.S. economy grew as autumn began and “further economic gains are probable in the first half of 2014,” according to the ITR Economics’ December 2013 report.
“Despite the partial government shutdown, economic data clearly suggest that the U.S. economy grew in September and that the growth continued through October,” ITR Economics forecast in a report for the Specialty Tools & Fasteners Distributors Association.
Retail sales, the S&P 500 and non defense capital goods orders all show positive signs, ITR Economics observed.
“The overall outlook of 2014 being an essentially flat year has not changed,” according to ITR Economics. “However, the first half of 2014 may be stronger than the second half of the year. Expect economic weakness to seep into the early months of 2015.”
ITR anticipates a “cyclical weakness is lurking for the economy” in 2014. Though housing starts are rising, the “rate of the rise is clearly dissipating as evidenced by the declining rates-of-change.” Mortgage application data indicates a decelerating process and that means “the economy is losing one of its major underpinnings for rid in 2014.”
ITR Economics overall is “more positive than negative about the first half of 2014.”
• U.S. industrial production is “positive and additional rise is probable.”
• On an annual basis, Canada’s economy grew 0.3% in August from one year ago, and has shifted into ‘Phase B, Acceleratig Growth’.”
ITR noted Canada and the European Union have reached a trade agreement to remove 99% of EU tariffs on industrial goods, including forest, chemical and plastic products and 95% of duties on seafood and some agricultural products. About 9% of Canada’s exports are shipped to the EU.
• Consumers can expect “modest” price increases with the Consumer Price Index at 1.6%. “Look for price pressures to remain relatively benign through 2014,” ITR predicted.
• Private nonresidential construction has been stagnant during recent months and is still dropping. ITR predicts the “downturn will be relatively mild and short-lived.”
• Construction product prices have been increasing on a monthly basis since June. Price pressure will climb at a steady pace through 2014.
While lumber and concrete product prices have been up, fabricated structural metal products are 0.1% below a year ago, which is the “steepest decline in nearly three years.”
• The Federal Reserve “has not wavered” in keeping short-term interest rates low. A weakening U.S. economy will keep interest rates down.
• Residential construction is rising at its fastest pace in nearly three decades. Construction remains below pre-recession levels. Housing starts have climbed an estimated 22.7% over the past year, but the growth rate peaked last March.
• Government construction is at its lowest level in four years and 12.2% below a year ago. State and local hospital construction tops the market as budgets heal.
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