Economist predicts the dollar will remain strong, Michigan economy to continue growing
What did Comerica’s Chief Investment Officer for Comerica Bank have to say at the chamber’s 2016 Economic Forecast on Tuesday at Good Morning Livingston?
Here are some of Dennis Johnson’s top projections:
• U.S. real GDP growth will be 2.4 percent in 2016 versus 2.5 percent in 205.
• Consumer prices will increase by 2.1 percent in 2016, compared to inflation of .2 percent in 2015
• Future increase in interest rates by the Federal Reserve will be data dependent and will likely be from 25 to 50 basis points in 2016.
• U.S. dollar will remain very strong and in demand compared with other currencies.
Johnson outlined some economic realities that will result in continued prosperity:
• Consumer have positive equity in their homes
• Savings rates have increased
• Lack of suppression of government spending. With the elimination of sequestration, it’s now “flat lined.”
• Unemployment rate will continue to decline to 4.6 percent in 2016.
• The increase in minimum wage and general wages increasing 2 percent to 2-1/2 percent will all be “good things for the economy.”
• Consumer spending will be up 2.5 percent.
• A record number of 17 million autos were sold in 2015, which had a great impact on entire industries.
• Home price sales are increasing. There is good growth in the sale of multi family and existing homes, and while new home sales are good, they’re not as robust as expected. With the loss of many in the construction industry during the recession, it has driven up the cost of new homes. Perhaps there will be an “uplift” in 2017.
Michigan’s economy is projected to continue to grow in 2016, but at a more measured pace versus the last several years. This is due to the maturation of the current auto cycle and the impact of the strong U.S. dollar on the manufacturing segment of the economy.
View Johnson’s presentation by clicking here.
Johnson chief investment officer for Comerica Asset Management Group, the investment management division of Comerica with $27.5 billion in assets under management. Johnson is responsible for the firm’s passive and active investment strategies, alternative investments, operations and administration, new products, client relations and business development.
In addition, Johnson is the Chairman of the Comerica Investment Policy Committee, the governing body responsible for establishing the company’s asset allocation policies. He also serves as Comerica’s primary spokesperson in the national media on investments, asset allocation and other matters pertaining to the global financial markets.
He received his Masters of Science in Finance from Virginia Commonwealth University and a Bachelors of Art in Economics from the Virginia Military Institute. Johnson is a chartered financial analyst (CFA) charter holder, a member of the Chartered Financial Analyst Institute and the Chartered Financial Analyst Society of Detroit. He is a member of the Detroit Economic Club, and serves on the boards of Detroit Public Television and the Charles H. Wright Museum.