Bank economists have marked down their forecasts for economic growth in 2016, but are predicting a rebound from the first quarter’s weak 0.8 percent annual growth rate.
Economists for 16 large banks convened by the American Bankers Association projected Friday that growth would recover to a 2.3 percent rate in the second quarter, adjusted for inflation. For 2016, gross domestic product growth will total 1.9 percent, they expect.
That would be a slowdown from the 2.4 percent pace of the previous two years, but closely in line with what the economists see as the U.S. economy’s potential.
“Moderating turbulence from emerging markets and the sustained thrust of American consumers should put the U.S. economy back on course,” said Carl Tannenbaum, chief economist of Northern Trust and the chairman of the group of economists.
Part of the recent slowdown has been driven by headwinds from abroad, including the drop in oil prices that has devastated U.S. producers and the rise in the dollar that has slowed exports. The economists expect the economy will return to full health as those factors abate, as oil heads back toward $50 a barrel by 2017 and inflation rises toward the Federal Reserve’s 2 percent target.
Officials at the Federal Reserve had projected 2.2 percent growth for the year as recently as March, but recent data has disappointed. The Fed will issue new figures, likely downgraded, after their meeting on June 14 and 15.
