Multiple factors are playing into expectations for disappointing real GDP growth in 2016 according to a report released by CME Group. Both short term and longer term considerations have led to this outlook from Blu Putnam, the Chief Economist of CME Group, including:
- Continuing shift in workforce composition from baby boomers towards millennials
- Stagnant growth in US workforce & lack of increase in labor productivity
- Near term impact of Mississippi River Valley flooding on GDP growth for Q1 & Q2
- Slow international growth across the economies of China, Brazil, and Russia
- Resulting decline in currencies
Based on these expectations and inflation predictions, Putnam also cites a possible delay in the Fed’s net rate hike until the summer months.