Business & Economy

Got a crystal ball? No? Then here's help with 2016 economic forecasts

Pump jacks at the Belridge oil field in California's Kern County. Oil prices are expected to remain low in 2016 and economic growth is projected to pick up slightly, forecasters say.
Pump jacks at the Belridge oil field in California's Kern County. Oil prices are expected to remain low in 2016 and economic growth is projected to pick up slightly, forecasters say.
Education Images/UIG via Getty Images

Every investor celebrating Christmas this week would love this gift: a really good crystal ball.

It'd be so helpful to look right through the orbuculum and glimpse the future prices of stocks, bonds and gold bars.

Unfortunately, no such ball exists. Our next best option is to turn to economic forecasters. And in general, the professionals see mostly good news for 2016.

The mainstream view is that the new year's gross domestic product — the broadest measure of the economy — will grow in the 2.5-to-3 percent range. In the first six-and-a-half years of this recovery, the average growth rate has been in the 2-to-2.5 percent range.

In other words, most economists believe the coming year may bring a slightly better pace of expansion than what we are seeing now.

Here are some 2016 predictions that reflect commonly held opinions among top forecasters:

While most predictions are on the positive side for companies, workers and consumers, economists also see potential trouble spots. Those include: a too-strong-dollar that could further depress U.S. export sales; continued sluggishness in China; plunging commodity prices that could lead to many more layoffs, and terrorist events.

And speaking of forecasts, how did the professionals do when predicting 2015?

Pretty good, really.

Here's a line from a Wall Street Journal story that ran in mid-December last year:

"The U.S. economy is poised for stronger growth in 2015 due to falling gas prices, a tighter job market and expectations of larger wage gains, according to the latest Wall Street Journal survey of economists."

Those forecasters may not have had a crystal ball, but at least for 2015, their darts mostly landed on the right numbers.

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