Insights from the Economic Outlook Symposium

On December 1st, 2017, over 100 economists and analysts from business, academia, and government gathered for the Chicago Federal Reserve’s 2017 Outlook Symposium. It’s at this symposium that thought leaders in economics analyze data from the previous year and make predictions for the year to come.

2018 is predicted to be a year of above-average growth for the U.S. economy. While the 2018 economy is forecasted to grow at a slightly slower pace than it did in 2017, it’s still above the historical average. This growth is part of the third-longest economic expansion on record.

2017 was a pivotal year in economics but it got off to quite a slow start, with the annualized rate of real GDP growth coming in at 1.2% in the first quarter. The year’s lousy beginning, however, was quickly overshot when the annualized rate of real GDP growth improved in the second quarter to 3.1% and 3.2% in the third. This steady growth is a sign of a healthy economy. Economists predict that the growth rate of real GDP in 2018 will equalize towards 2.3%.

The upcoming year also promises to be good for oil consumption, as oil prices are predicted to average $53.18 per barrel in the final quarter of 2018, a few cents lower than 2017 prices. This can be good or bad news for some automotive dealers. When oil prices are fairly low, consumers tend to purchase vehicles that are less fuel efficient, often at a higher cost.

Inflation is predicted to increase from 1.8 to 2.0 in 2018 – a modest, but relatively noticeable change for most businesses. This inflation increase will not slow spending. In fact, real personal consumption expenditures are forecasted to expand at a rate of 2.3% in 2018. For retailers and other B2C companies, this is welcome news.

Also, businesses are planning to invest in growth assets in 2018. The growth rate of real business fixed investment is anticipated to grow at a solid 3.5% in 2018. More businesses than ever will be building up their physical infrastructure.

Overall, 2018 looks like it will be a successful year for business in these United States.