Alan Beaulieu, Senior Economic Advisor at ITR Economics, predicts the US economy will continue to grow due to its entrepreneurial spirit and tolerance for risk that were proven during this quarter’s turbulent legislative climate. Wholesaler-distributors should experience growth for the remainder of 2013 and early 2014, but will encounter cyclical weakness with the rest of the US economy in the second half of 2014. Some of the empirical trends that ITR Economics are using to predict this downturn are as follows:
- Deceleration in Housing Starts’ rise;
- Mortgage applications declining;
- Decline in the ITR Leading Indicator;
- Pronounced weakness in the bond market;
- Deceleration in the employment rising trend; and
- Rate-of-change decline in the University of Michigan Consumer Expectations Index.
Opportunities in the Private Sector
To combat this downturn, Beaulieu states that wholesaler-distributors can find opportunities in the oil & gas sector of the US economy, which is now operating at its highest level in close to 40 years. The return of manufacturing to North American shores will continue to increase as energy intensive industries are attracted to the low natural gas prices. U.S.-based exporters can also expect to benefit since foreign, private sector initiatives have improved market conditions.
Federal Reserve Impact
Beaulieu also noted that the confirmation of Janet Yellen as the next chairman of the Federal Reserve would support ITR Economic’s expectation of low interest rates through 2014 as she works for quantitative easing and loose money in the economy.