Two Competing Economic Narratives for 2019


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The U.S. economic outlook, while positive, is a tale of two stories, says Comerica Bank Chief Economist Robert Dye on the latest episode of the ABA Banking Journal Podcast. One story is strong current conditions, including job growth, labor force participation and wage growth. “It’s been absolutely remarkable, the ability of this economy to create and fill jobs.” The strength of the consumer is a key positive to the economy, Dye says.

However, according to the consensus forecast of the American Bankers Association’s Economic Advisory Committee, which Dye chairs, there are growing downside risks, including financial market volatility, trade tensions, the possibility of a hard Brexit and the quality of corporate debt. “While we do not forecast a recession,” Dye says, “we have multiple factors building up, and we are concerned that there is at least some potential for compounding of these factors.”

Dye also discusses trends in business and consumer credit, the projected path of monetary policy in 2019 and the effects of a prolonged partial government shutdown.

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