Welcome!

News Feed Item

TD Economics: Springtime in America

Economic growth expected to accelerate from 1.9% in 2013 to 2.7% in 2014 and 3.2% in 2015.

CHERRY HILL, N.J., March 20, 2014 /PRNewswire/ -- Snowstorms and freezing temperatures slowed the economy at the start of this year, but spring has just arrived and with it will come brighter prospects for growth, according to a new report by TD Economics (www.td.com/economics), an affiliate of TD Bank, America's Most Convenient Bank®.

America's Most Convenient Bank.

"Economic momentum in the first quarter was restrained by a number of temporary factors, the biggest of which was an unusually cold winter, says TD Chief Economist Craig Alexander. "As the weather warms up, the fundamentals underpinning growth will come through. With fiscal drag less than half of what it was last year and consumer finances in the best shape in several years, economic growth is set to accelerate."

From a rather mediocre pace of 1.9% in 2013, TD Economics forecasts the economy will grow by 2.7% in 2014 and 3.2% in 2015.

Weather or not

It's not just the weather reports that have been hard to watch in recent months. News on the economy has also been rather sour, with a number of top line indicators like job growth and home sales losing momentum.

"The string of bad data has created doubts about the strength of the U.S. economy," says Alexander. "These doubts are misgiven. Comparing economic data and weather across the United States, a pattern emerges – activity was hit hardest where the weather was the worst."

Other elements such as expiring unemployment benefits and tax credits for business investment are also weighing on near-term economic growth, but will diminish in the months ahead.

"Moving forward, economic momentum of the private sector won't be masked by temporary influences and the government sector," says Alexander.  Overall the level of drag from federal fiscal policy, which is estimated to have cut 1.3 percentage points from economic growth in 2013, is likely to fall to around 0.5 percentage points in 2014. Moreover, state and local governments are likely to move from spending cuts to reinvestment.

Housing recovery to move from investors to new buyers

One of the areas of the economy where activity has slowed noticeably is the housing market. Existing home sales reached a peak in July of last year and have fallen for five of the past six months. While some of this is due to poor weather, it's not fully to blame.

"The recent fall in home sales likely reflects the transition away from investor-supported buying," says Alexander. "As home prices and interest rates rise, the value proposition for investors diminishes."

The next stage of the housing recovery will shift more to traditional homebuyers. This transition was impeded by a sudden 100 basis point increase in mortgage rates in 2013 and, to a lesser extent, the introduction of mortgage regulations at the start of this year.

Borrowing costs have recently dropped, and are likely to rise slowly over the course of this year and next. Relatively low mortgage rates will keep housing affordable and, in addition to greater certainty on the regulatory front, should support a rebound in housing demand.

"The benefit of reduced fiscal drag and a more positive outlook for the economy as a whole is that it will feed back into the housing market," Alexander said.

Soft inflation gives the Fed leeway to keep rates low

As economic growth pushes north of 3%, it won't be long before the siren calls for the Fed to begin raising interest rates will begin to sound. However, scant evidence of inflation is likely to mean these calls will fall on deaf ears.

"While the economy has made substantial progress, the reality is that inflation is still running well below the Fed's target," says Alexander. "This should give the Fed ample leeway to leave rates accommodative even as it finishes its asset purchase program later this year."

TD Economics expects the Federal Reserve to continue tapering its asset purchase program at its current measured pace and to end it by the fourth quarter of this year. Still, it is likely to be the fourth quarter of 2015 before the target for the fed funds rate moves off its zero lower bound.

TD Economics provides analysis of global economic performance and forecasting, and is an affiliate of TD Bank, America's Most Convenient Bank®.

The complete findings of the TD Economics report are available online at http://www.td.com/document/PDF/economics/qef/qefmar2014_us.pdf

Logo - http://photos.prnewswire.com/prnh/20131120/MM21057LOGO

SOURCE TD Bank

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
WebRTC sits at the intersection between VoIP and the Web. As such, it poses some interesting challenges for those developing services on top of it, but also for those who need to test and monitor these services. In his session at WebRTC Summit, Tsahi Levent-Levi, co-founder of testRTC, reviewed the various challenges posed by WebRTC when it comes to testing and monitoring and on ways to overcome them.
Every successful software product evolves from an idea to an enterprise system. Notably, the same way is passed by the product owner's company. In his session at 20th Cloud Expo, Oleg Lola, CEO of MobiDev, will provide a generalized overview of the evolution of a software product, the product owner, the needs that arise at various stages of this process, and the value brought by a software development partner to the product owner as a response to these needs.
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
In the first article of this three-part series on hybrid cloud security, we discussed the Shared Responsibility Model and examined how the most common attack strategies persist, are amplified, or are mitigated as assets move from data centers to the cloud. Today, we’ll look at some of the unique security challenges that are introduced by public cloud environments. While cloud computing delivers many operational, cost-saving and security benefits, it takes place in a public, shared and on-demand ...
In his session at @ThingsExpo, Sudarshan Krishnamurthi, a Senior Manager, Business Strategy, at Cisco Systems, will discuss how IT and operational technology (OT) work together, as opposed to being in separate siloes as once was traditional. Attendees will learn how to fully leverage the power of IoT in their organization by bringing the two sides together and bridging the communication gap. He will also look at what good leadership must entail in order to accomplish this, and how IT managers ca...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
SYS-CON Events announced today that Outlyer, a monitoring service for DevOps and operations teams, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Outlyer is a monitoring service for DevOps and Operations teams running Cloud, SaaS, Microservices and IoT deployments. Designed for today's dynamic environments that need beyond cloud-scale monitoring, we make monitoring effortless so you...
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain. In this power panel at @...
Cloud Expo, Inc. has announced today that Andi Mann and Aruna Ravichandran have been named Co-Chairs of @DevOpsSummit at Cloud Expo 2017. The @DevOpsSummit at Cloud Expo New York will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and @DevOpsSummit at Cloud Expo Silicon Valley will take place Oct. 31-Nov. 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
In his session at @ThingsExpo, Steve Wilkes, CTO and founder of Striim, will delve into four enterprise-scale, business-critical case studies where streaming analytics serves as the key to enabling real-time data integration and right-time insights in hybrid cloud, IoT, and fog computing environments. As part of this discussion, he will also present a demo based on its partnership with Fujitsu, highlighting their technologies in a healthcare IoT use-case. The demo showcases the tracking of pati...