The economy is in what will soon be the fourth largest expansion in recent times, according to Bob Dieli, president and founder of RDLB, Inc. Speaking at Heavy Duty Aftermarket Dialogue in Las Vegas, Dieli says the expansion is in it 67th month. It is closing in on being longer than the November 2001 to December 2007 expansion, which lasted 73 months. “Maybe it is time to stop saying bad things about this recovery,” he says. “The outlook is positive for the coming year [and beyond].”
Bill Strauss, senior economist at the Federal Reserve Bank of Chicago, who joined Dieli on the panel, agrees and says Gross Domestic Product to grow at just below 3% in 2015 and move slightly above in 2016.
Dieli and Strauss expect to see some changes on federal fiscal policy with a possible increase in the Federal Funds interest rate. The Federal Reserve board is meeting this week to discuss policy and Strauss was unable to provide additional details. However, he did say that if the Federal Reserve raises the interest rate that should not be considered a negative, and in fact is a sign of a stronger economy. And Dieli reminded the audience that when looking at making changes to fiscal policy “the Fed is not a fan of starting recessions,”
Dieli used the analogy of blood pressure in describing inflation rates indicating that numbers that are too high are bad but so are low numbers. The current rate of 1% is too low, according to Dieli, with 2% considered healthy. Strauss expects it to rise slowly over the next several years and end up at about 3.75% in 2017.
Turning more specifically to trucking, Dieli says trucking employment is growing and is up 15.8% since March 2010. He expects growth to continue.
The one area of concern with the economy is events overseas which will continue to have a major influence on both the course of economic growth and the decisions made by the Federal Reserve.