In a recent survey conducted by the Associated Press, top economists anticipated that economic growth over the next two years is not expected to reach the levels that were predicted earlier this year. According to the majority of economists surveyed, three important economic indicators — economic expansion, hiring, and wages — are expected to increase at slower-than-predicted rates.
Despite the constant promise of job creation, the growth rate in hiring people has only been 2.2 percent annually. Furthermore, almost six in ten economists surveyed anticipated that the current hiring rate of 243,000 jobs per month will decrease to 175,000 per month.
For those who are employed, the situation is not much better. Recently, wages have increased by an average 3.5 percent each year. According to nearly 60% of the economists surveyed, wages are expected to increase by less than 3.5 percent annually for the next two years.
With unemployment rates and wages increasing just slightly, it is no surprise that economic growth is not expected to reach levels that were predicted earlier in the year. With steady hiring and rapidly declining gas prices in the beginning of 2015, economists had predicted a 3 percent growth rate. However, the slowing down of various indicators has led almost 70 percent of economists to anticipate overall economic growth until 2017 to be less than 3 percent.
According to Luke Tilley, Wilmington Trust’s chief economist, “The slowdown in labor force growth is the main reason [economic] growth in the U.S. will be slower than it was in the second half of the previous century.” With stagnant wages and limited hiring, combined with baby boomers retiring and millennials staying in school longer, a slowing labor force comes to little surprise.
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