The U.S. economy is expected to grow at a rate of +2.6% in 2019, less than the +2.9% growth seen in 2018, but still indicative of solid economic fundamentals, according to the IHS Markit December US Economic Forecast Flash from Joel Prakken, chief U.S. economist and Executive Directors Patrick Newport and Ben Herzon.
IHS says the new year will see countervailing pressures on U.S. growth. On the downside, the rising dollar, tightening credit conditions and higher tariffs could still hurt growth, while on the upside, low interest rates, fiscal stimulus and constrained oil prices bode well for the U.S. economy. The table below offers IHS forecasts for some key macroeconomic indicators.
In a separate report, IHS Markit Chief Economist Nariman Behravesh said global economic growth will edge down to +3% in 2019, from a rate of +3.2% in 2018. He said Europe’s economic expansion will slow even further, declining to +1.5% in 2019.
“Policy mistakes remain the biggest threats to global growth in 2019 and beyond,” he said in the press release. “Simmering trade conflicts are dangerous, not because they have done damage so far — they haven’t — but because they could easily escalate.
“At the same time, the sell-off in equity and commodity markets, on top of the gradual removal of stimuli by some central banks, means that financial conditions worldwide are tightening. The good news is that the probability of a single policy event seriously hurting global growth in 2019 is still relatively low.”