The forecast for 2016 for business and the US economy is looking good. The projected GDP growth rate will stay in the 2 to 3 percent range. The unemployment rate is not expected to change very much. The experts predict there will be no destructive boom and bust this coming year.
The biggest business shift will be the concentration on shale oil production. The production of shale oil has had an effect on driving down oil prices. This is good news for the reduction in oil prices has brought down the cost of raw materials, transportation, food and this has the knock on effect of raising profit margins. This in turn leaves consumers with more spending cash in their pocket.
The economy is expected to improve in 2016. The expected increase in GDP will slow in 2017. US business in particular manufacturing will increase quicker than the general economy. Service sectors like Clockspot will remain stable with little growth. The predicted unemployment rate will remain the same for the next three years. Any job growth will be in low paying sectors and there is much future for the long term unemployed.
Inflation will rise slowly to 2.0% in 2018. The low inflation experienced in 2015/16 is mostly caused by lower oil prices. A concern is the expected gradual rise in interest rates through 2016.
The stock market is expected to set new highs. There has been a fall of 10 percent in recent times, but has bounced back. The correction may give it the impetus to set records in 2016.
The Housing Market Will Strengthen which will be good for homeowners. Home prices will rise slowly, because of creeping interest rate which will lower demand.
Fuel prices are expected rise after the spring, but may drop off again my April. But because of the increase in shale production fuel prices are not expected to rise significantly which will be good for business.
The effect on Business
The expectation is overall 2016 will be a prosperous year. The financial crisis seems to be a long way behind us now. The stock market may be irrational for a while; this usually means a peak of the business cycle. However, another recession is most probably two to three years away. This is because the recovery is slow to peak. Organizations should stay focused on their financial well-being. It is expected commodity prices such as gold, oil, and coffee, will stay low. This will translate to lower food prices.