CPA: U.S. can expect 3% growth rate for ’14

PROVIDENCE – The U.S. can expect to maintain a growth rate of about 3 percent for the balance of the year, with job creation apparently moving up a notch with four consecutive months of employment gains in excess of 200,000, according to CPA Kent W. Gladding, director of investments for Washington Trust Wealth Management, who is based in Providence.
“The U.S. economy reached a major milestone in May when nonfarm payrolls exceeded the prior peak of January 2008, as the economy at long last recovered the job losses of the Great Recession,” Gladding said in his Economic Review and Outlook of June 30.
“Our relative optimism hinges on consumer spending also perking up, supported by income growth resulting from a stronger labor market,” said Gladding.
On an inflation adjusted basis, average wages have increased only 2.5 percent in the past six years. However, as job openings increase and slack in the labor market declines, businesses are more likely to boost pay, he said.
“With economic policy and financial market conditions supportive, our expectation of a modest acceleration in U.S. growth seems reasonable,” said Gladding. “The UK economy is actually performing well, and the Euro zone has a central bank that is priming the pump, or running the printing presses, at full bore. Absent an oil shock, the developed economies generally should continue to make progress with the U.S. in the lead.”