Guest Commentary: All Indicators are Positive for Continued Economic Growth
By Glen Olpin, Senior Vice President—Chief Economist
February of 2018 marks the 104th straight month of national economic recovery. This period of economic improvement may be the longest, yet weakest on record, but there are no signs of a slowdown on the horizon.
Utah and neighboring Intermountain West states are experiencing stronger overall growth than the national average. Nationwide strength in economic growth as measured by gross domestic product (GDP) was recently reported for 2017; we expect continued strength throughout this year.
Businesses have acted cautiously during the latest cycle of an improving economy; however, recent measures assessing the commercial sector show increased strength and confidence. We expect a favorable business services and lending climate to prevail in 2018.
Consumers have led the recovery and remain optimistic about the future. Utah and surrounding states are exhibiting strong employment growth and personal income is rising. Consumer spending has been solid and we expect to see continued strength in spending this year. There are some cautionary indicators, however, including consumer debt rising to pre-recession levels.
Inflation has been slowly trending upward since late 2015, but it does not constitute a threat to continuing economic growth; we are predicting inflation to remain in the 2% to 2.5% range during the coming year.
Short-term interest rates have slowly inched upward and are expected to rise by as much as an additional 1%. As these rates increase, long-term interest rates are expected to move moderately higher as well.
New and existing home sales have been healthy in the face of increasing prices. Housing and construction spending should stay robust. Real estate lending rates are also forecast to remain relatively low. These positive indicators are combining for an already favorable real estate environment to continue throughout 2018.
We have seen ongoing demand for automobiles and that trend is expected to continue. The need for America First vehicle financing is strong. We pledge to remain the leader in auto lending for our members.
Consistently low interest rates, a strengthening business environment, the wealth effect from increasing home values, continued fundamental vitality in the stock market, as well as the hope of reduced regulations and tax relief, are combining to increase consumer and business confidence in a growing economy well beyond 2018.
We expect this to be another successful year for America First Credit Union. We appreciate your membership and remain dedicated to serving your complete financial needs as we move forward together.