ABA Banking Journal - September/October 2017 - 13
New ABA Data Finds Mortgage
Borrowers Seek Technology
and In-Person Services
The U.S. economy will continue to expand, with
growth in 2017 forecast to just above 2 percent,
according to recent analysis from ABA's Economic
Advisory Committee. Committee members-which
include 15 chief economists at some of the nation's
largest banks-say they expect growth in 2018 to
slightly accelerate with support from fiscal stimulus.
"The forces that have sustained eight years
of progress, such as low interest rates and
improvements in labor markets, will continue into the
next year," comments EAC Chairman Christopher
Probyn, managing director and chief economist at
State Street Global Advisors. "Moreover, business
and personal tax cuts, along with an increase in
infrastructure spending, should boost the economy."
The U.S. economy is already at or near full
employment, the economists noted, adding that they
expect job growth to taper progressively through
2018, with unemployment potentially dropping to
4 percent or lower by the end of 2018. In addition to
fiscal stimulus, consumer spending and a pickup in
business capital spending will likely sustain growth
projections, though Probyn adds that "the extent of
the improvement in 2018 will depend largely on the
size and composition of fiscal stimulus."
Committee members say they anticipate the Federal
Reserve to raise its federal funds target range again
in 2017 (the consensus is December) and three
times in 2018. A combination of fiscal stimulus,
faster growth and accelerating inflation could lead
the Fed to move more aggressively, Probyn explains.
The committee also observed sustained strength
in the availability of bank loans. Delinquency and
charge-off rates will remain near historical lows,
they say. Bank consumer credit is expected to
grow 5.7 percent this year and 5.0 percent next
year, while business credit will rise 3.5 percent in
2017 and 4.2 percent in 2018. "Banks are in an
excellent position to support continued expansion,"
"Banks invest billions of dollars to offer their customers the latest
technology. But at the end of the day, nothing compares to sitting
across the table, face-to-face with a banker when you're making the
single most important investment of your life."
-ABA EVP Bob Davis
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