Despite a drop in gross domestic product (GDP) during the first quarter of 2014, U.S. economy is in good shape, says Steve Rick, CUNA Mutual Group’s chief economist.
“We had a 1% decline in GDP during the first quarter, mainly due to the bad weather we sustained in the U.S.,” Rick says. “That caused construction activity, transportation, and retail sales to decline. Put those together and we had a declining economy.”
Stronger business investment, a rebounding housing market, and rising auto sales, however, will turn this around, he says.
“We expect 3% economic growth for the rest of the year, which will accelerate to 3.8% going into 2015,” Rick predicts.
He offered these insights during CUNA’s Pressing Economic Issues Series (PEIS) in June. This resource provides 30-minute updates each month on current economic issues and hot topics facing credit unions.
Healthier household balance sheets will also push the economy in a positive direction.
“Consumers have paid down much of their debt and consumer confidence is rising,” Rick says. “Put those together and consumers are going to start spending more.”
Click here for a condensed version of Rick’s June 2014 PEIS discussion.