December Business Conditions Monthly

Chart 1. The pace of Fed interest-rate increases (top, dotted line) and the strength of economic growth worldwide (bottom) are critical to the outlook for the U.S. economy.
Despite some risks, the U.S. economic outlook for 2016 appears favorable.

The 45th president of the United States will be elected in 2016. Along with death and taxes, the one thing we can be sure of is a long and contentious campaign season full of claims and counterclaims. At AIER, our goal is to provide an unbiased and accurate evaluation of the economy. In this issue we present our outlook for the U.S. economy in 2016. Overall, our assessment is that the economy is in relatively good shape though there are a number of risks and uncertainties.

The current expansion began in July 2009, making it 78 months old, well above the average age of post-World War II business cycle upturns. Yet, there are few signs of imbalances or overheating. To the contrary, the economy has yet to regain significant momentum in a number of areas.

While there are important aspects of the economy that we will be watching carefully in 2016 (Table 1), the two most important will be Federal Reserve policy on interest rates and global growth (Chart 1). 

Next/Previous Section:
1.Overview

2. Economy

3. Inflation

4. Policy

5. Investing

6. Pulling It All Together/Appendix

Chart 1. The pace of Fed interest-rate increases (top, dotted line) and the strength of economic growth worldwide (bottom) are critical to the outlook for the U.S. economy.

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