US Economic Outlook

TD Economics notes in a report as follows ....

• In a pattern similar to last year, unseasonably cold weather and record snowfall in parts of the country combined to slow economic activity at the start of this year. As it did in 2014, growth will bounce back in the quarters ahead.
  
  
• For the year as a whole, we expect economic growth to accelerate to 3.0% in 2015, up from 2.4% in 2014. With the unemployment falling to 5.0% and the Federal Reserve beginning to normalize monetary policy, economic growth will edge down to 2.8% in 2016.
  
  
• Consumer spending is at the center of the economic outlook. We expect personal consumption expenditures to grow by 3.4% in 2015, accounting for the bulk of the acceleration in economic growth.  Our optimism on the path of spending is grounded in rising income growth, which will continue to be supported by job gains and steadily increasing wages.
  
  
• The rise in domestic spending will benefit the rest of the world, as the high dollar makes imports cheaper and exports less competitive. The downside is that the U.S. trade deficit will widen. Net-exports are expected to subtract 0.4 percentage points from real GDP growth over the next year.
  
  
• With the lofty dollar keeping downward pressure on inflation, the Federal Reserve can be cautious in moving interest rates higher. The fed funds rate is likely to end 2015 at 0.75%, rising to 1.25% by the end of 2016.