Auto sales will be at record levels, unemployment to fall
The U.S. economy will grow next year at its highest rate in a decade and the national unemployment rate will fall below 5 percent for the first time since 2007, economists at the University of Michigan said in a report released Thursday morning.
They said the national economy will add 4.7 million jobs over the next two years — 2.4 million jobs in 2016 and 2.3 million in 2017 — after gaining 2.9 million jobs this year, according to an annual forecast by Daniil Manaenkov, Gabriel Ehrlich, Matthew Hall, Ben Meiselman and Aditi Thapar at the Research Seminar in Quantitative Economics in UM’s Department of Economics.
Unemployment will continue to fall from last year’s rate of 6.2 percent to 4.9 percent next year and 4.6 percent in 2017, they said.
Gross domestic product is expected to rise from 2.4 percent last year and this year to 2.6 percent next year and 2.9 percent in 2017.
“That ordinary performance during 2015 masks a stronger domestic economy slowed by sluggish growth in its trading partners,” Manaenkov said in a news release. “Labor market conditions are improving, wage growth is picking up again, vehicle sales are booming and the housing market is continuing its recovery.”
Construction of new homes, both single-family and multi-unit housing, is expected to continue to rise, from 1 million units last year to 1.13 million units this year, 1.31 million next year and 1.47 million in 2017.
Sales of light vehicles, averaging about 17.4 million sold this year, is expected to hit 18 million next year and 18.1 million the year after.
“There have been only 10 months in which the recorded pace of light vehicle sales exceeded 18 million units. Eight of the 10 months occurred 10 or more years ago, and the other two were September and October 2015,” Hall said. “We project the strong pace of vehicle sales to continue throughout the forecast. In fact, we believe this year will match 2000, the strongest year on record, and the next two years will be even better.”
The UM forecast is based on the Michigan Quarterly Econometric Model of the U.S. economy and compiled by the UM Research Seminar in Quantitative Economics.
