Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

Economy expected to gain momentum in 2014, lifting growth to fastest pace since recovery began

FILE - In this Thursday, Oct. 10, 2013, file photo, employees at Sheffield Platers Inc. work on the factory floor in San Diego. The Commerce Department releases fourth-quarter gross domestic product on Thursday, Jan. 30, 2014 (AP Photo/Lenny Ignelzi, File)

Enlarge Image

FILE - In this Thursday, Oct. 10, 2013, file photo, employees at Sheffield Platers Inc. work on the factory floor in San Diego. The Commerce Department releases fourth-quarter gross domestic product on Thursday, Jan. 30, 2014 (AP Photo/Lenny Ignelzi, File)

WASHINGTON - The U.S. economy likely grew solidly in the final quarter of 2013, momentum that's expected to carry into this year. Most economists think 2014 will produce the strongest growth since the recession officially ended in June 2009.

On Thursday, the government will make its first of three estimates of economic growth for the October-December quarter. Economists are forecasting an annual growth rate of 3.3 per cent, after an even stronger 4.1 per cent rate for July through September.

For all of 2013, analysts think the economy grew about 1.9 per cent. That would be below the 2.8 per cent growth for 2012 as measured by the gross domestic product. GDP represents the country's total output of goods and services.

For all of 2014, analysts are more optimistic. Many foresee GDP growth of 3 per cent or better.

A key reason for their optimism is an improved outlook for the government sector. Overall growth was reduced by an estimated 1.5 percentage points in 2013 because of a drag from higher federal taxes and deep government spending cuts. Those effects are expected to subside in 2014.

This year, economists also think the economy will get a lift from continued gains in hiring. Further steady job growth would give more households money to spend and help lift consumer spending, which accounts for about 70 per cent of economic activity.

In addition, U.S. manufacturers are expected to get a lift from rising global demand. And at home, housing construction and auto sales, which showed strength last year, are expected to register further gains in 2014.

Because of the stronger growth prospects, the Federal Reserve on Wednesday announced that it would continue to reduce the monthly bond purchases it's been making to try to boost the economy.

The Fed bought $85 billion a month in bonds last year to try to keep long-term interest rates low. It announced an initial $10 billion reduction in December. And after its meeting Wednesday, it announced another $10 billion cut. That will put its monthly purchases at $65 billion.

Many analysts think the Fed will keep paring its support at each of its meetings this year until it eliminates new bond purchases entirely in December.

In making the announcement, the Fed cited an improving economy, including more strength in consumer and business spending.

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Brandon Sun Business Directory
Submit a Random Act of Kindness
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates