In 2017, experts predict automotive sales will continue to increase and credit card debt will break an all-time record high.
WalletHub has made economic predictions for each of the past five years. Here’s what to expect in the new year:
1. The U.S. will see GDP growth of about 2.1 percent in 2017.
“The economy will start off well, but will likely slow after that, partly due to concerns about rising deficits and partly due to monetary policy that will tighten,” said Michael Klein, professor of international economic affairs at Tufts University.
2. The unemployment rate will settle around 5 percent during 2017. The unemployment rate sat at about 4.6 percent in November, far below the historical average of 5.8 percent. Unemployment is at its lowest point since 2007.
“It is unlikely to fall much further,” said Bruce Hansen, chair of economics at the University of Wisconsin-Madison. “It may either stay roughly constant, as it has recently, or increase slightly.”
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3. Though the stock market has been on the rise since the election, don’t expect that trend to continue for long.
WalletHub expects the S&P to finish 2017 at about 2,288. Stocks are still expensive, with shares of the average S&P 500 company trading at roughly 26 times earnings, compared to a historical average of just under 16 times.
4. U.S. automotive sales will continue to do well in 2017. More than 17 million units will are expected to be sold in the next year.
“Auto sales will remain robust,” said Scott Hein, chair of the Texas Tech School of Banking. “But growth will not accelerate since this has been the one area that has done well in the weak economic growth environment experienced over the last half dozen year.”
5. Home sales will reach 6 million in 2017. The amount of homes sold will increase about 200,000 units from the estimated 5.8 million sold in 2016.
“If interest rates rise slowly, we may see a nice bump in home sales and mortgage availability as buyers see low interest rates slowly fading and banks have higher rates to buffer against risk,” said Robert Eyler, director of the Center for Regional Economic Analysis at Sonoma State University.
6. Credit card debt will break all-time records, topping $1 trillion owed. U.S. consumers are on track to end 2016 with the largest net increase in credit card debt since 2007.
“With charge-off rates hovering stubbornly near historical lows and consumer performance clearly regressing, debt levels still have more room to run. So there’s no reason to think we won’t blow past $1 trillion in outstanding balances with ease in 2017,” according to WalletHub.
7. Consumer credit scores will peak at 675 next year. Since the end of the Great Recession, credit scores have been rising steadily. The average person’s credit score should rise from its current level of 668 to 675.
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