Magazine article Mortgage Banking

Growth Forecast Clear for Next Three Years

Magazine article Mortgage Banking

Growth Forecast Clear for Next Three Years

Article excerpt

Look for unabated economic growth, as well as continued foreign investment in the United States, for the next three years, although the five-year forecast calls for possible dark regulatory skies, according to one real estate expert.

The U.S. economy has enjoyed unabated growth for some eight years, and it is poised for another three years of the same, Peter Linneman, professor of real estate finance and public policy at the Wharton School of Business, Philadelphia, told attendees at the annual Real Share commercial real estate conference in Washington, D.C.

"We'll average about 3 1/2 percent to 4 percent GDP [gross domestic product] growth, [and] we'll average just fewer than 2 million jobs [growth] for each of the next three years," said Linneman.

Of the three key threats to economic growth--"overshooting" interest-rate hikes by the Federal Reserve, "dumb decisions" by the government and "business hubris"--the economy will enjoy a kind of immunity from the first two threats during the next three years. Meanwhile in the private sector, corporate overconfidence will take some time to kick in, said Linneman.

"The interesting thing is that nothing bad happens in the next three years--but look out four to five years from now, because you can get a confluence of the three [threats] happening all at once," he said. …

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