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Economist Kathleen Navin speaks about gross domestic product trends during the Springfield Area Chamber of Commerce’s annual Economic Outlook event.
SBJ photo by Wes Hamilton
Economist Kathleen Navin speaks about gross domestic product trends during the Springfield Area Chamber of Commerce’s annual Economic Outlook event.

Economist offers positive financial forecast at chamber event

Posted online

While storm clouds have been a frequent sight in the Queen City over the past couple weeks, a largely sunny national economic forecast was shared Aug. 22 before attendees at a Springfield Area Chamber of Commerce event.

Approximately 325 people were in attendance at the chamber’s annual Economic Outlook event, held at University Plaza Hotel & Convention Center. Keynote speaker Kathleen Navin, an economist with St. Louis-based firm Macroeconomic Advisers by IHS Markit, provided an overview of the national economy, which she said is solid overall with gross domestic product growth of 3.2 percent and an unemployment rate of 3.9 percent.

Navin said her firm forecasts the GDP rate to decline in 2019 to 2.3 percent – still above the U.S. trend of 2 percent. But with factors such as the financial impact of President Donald Trump’s economic stimulus expected to end in 2020, and low interest rates continuing to rise, Navin said the GDP may dip 1.7 percent for that year.

Consumer spending has been a strong boost to the healthy GDP in recent years, Navin said, although the total has been less than in 2015 and 2016.

“So it is moderating, but it does remain a very large contribution to GDP growth,” she said.

However, retail spending remains strong for 2018, according to estimated retail sales data recently released by the U.S. Census Bureau. Consumer spending increased by 6.4 percent year over year to $507.5 billion in July.

“With the above trend growth, what we expect to see is a further tightening of labor markets,” Navin said, noting this should lead to a slight decline in the unemployment rate

By mid-2019, the firm predicts the rate will dip to 3.4 percent.

The Federal Reserve has raised interest rates twice this year, Navin said, and it’s currently at 2 percent. She expects two more hikes will take place before year’s end – once in September and again in December, followed by three more forecasted increases in 2019.

Navin, who holds bachelor’s and master’s degrees in economics from the University of Missouri-Columbia, has worked for Macroeconomic Advisers since 2010. In a Wall Street Journal survey of U.S. economists, Macroeconomic Advisers was ranked as the most accurate economic forecaster for 2017.

The chamber’s economic development subsidiary, Springfield Business Development Corp., organized the Aug. 22 event. It is part of the chamber’s annual Outlook series, which continues Oct. 3 with the 2018 Education Outlook event scheduled at White River Conference Center.

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