Jeffry Bartash --- Market Watch
WASHINGTON (MarketWatch) — The U.S. economy finally got a big jolt of energy in 2014 after the lamest recovery since World War II. And 2015 is shaping up to be an even better year.
Here are five things consumers and investors can count on (probably) in 2015:
The economy will grow 3% for the first time in 10 years
The U.S. is set to add nearly 3 million jobs in 2014 — the biggest increase since 1999. The burst in job creation, expected to continue in 2015, is sure to fuel consumer spending. So, too, will a plunge in gasoline prices that’s given households extra cash to spare on other goods and services. See: Americans saved $14 billion as gasoline prices declined in 2014.
The pickup in consumption in turn will entice businesses to hire and invest more to keep up with rising sales. The result: The U.S. is likely to grow more than 3% for the first time since 2005.
Bernard Baumohl, chief global economist of the Economic Outlook Group, said he is even more optimistic. “The next two years could be the best two we have seen in at least a decade,” he said. “There is clearly a lot of evidence the economy is gaining a lot of momentum.”
Perhaps the biggest domestic threat to the 3% growth scenario would be a surprisingly swift hike in interest rates, but from all indications a dovish Federal Reserve is unlikely to take aggressive action in 2015.
Wages will finally accelerate after years of stagnation
One of the main shackles on the economy over the past four years has been stagnant wages. Hourly earnings have risen an average of 2% annually — just two-thirds of the long-term U.S. average.
Yet that’s finally about to change. With hiring up and unemployment falling, businesses will have to go the extra mile for employees or risk losing sales to competitors because they lack enough staff to boost production.