The U.S. economy is expected to end 2017 with significantly higher production growth rates and a better unemployment rate than 2016, according to economists, and gross domestic product projections show promise for 2018.
At a projection of 3 percent, the GDP will be much improved from the 1.5 percent rate in 2016.
The November job report shows the economy added 228,000 jobs, and the unemployment rate held at a 17-year low, signs the economy is growing at a healthy pace. In spite of the official low unemployment rate, broader measures remain higher. The broadest rate, which includes discouraged workers who have stopped searching for work, as well as part-time workers who want full-time hours, stood at 8 percent in November.
Over the last 12 months, professional and business services added more jobs than any other industry, followed by health care, hospitality and manufacturing. The retail industry continues to struggle due to structural challenges.
Globally, the economy is expected to have robust growth in 2018. Many economists forecast global GDP growth of 4 percent. Not only that, the strength in global growth is expected to be broad based across most advanced and emerging economies. However, the risk to global growth has remained high due mostly to political issues such as the potential conflict on the Korean Peninsula and the Middle East.
Regionally, the GDP has improved as well. Pennsylvania, West Virginia and Maryland mirror the national economy, which will likely get an extra boost if Congress passes the proposed tax reform plan. The Bureau of Economic Analysis estimated second quarter growth rates of 2.5 percent in Pennsylvania, 4.1 percent in West Virginia, and 2.4 percent in Maryland.
The stock market is also booming, as is evident by the Dow Jones Industrial average that as of mid-December was more than 3.5 times the 6,627 that the index was on March 6, 2009.
According to the Conference Board forecast, business investment is expected to accelerate in the areas of technology, machineries, defense-related equipment and construction equipment.
Confidence in the manufacturing sector has been especially strong, bringing about a 20 percent rise in warehousing investment since last year.
So, a stronger economy holds promise for more jobs. In fact, the Bureau of Labor Statistics’ occupational outlook notes overall employment should grow by about 7 percent between 2016 and 2026, and of jobs requiring a college education, business degrees top the list.
Business degrees are required for the majority of the top 20 occupations that typically require a bachelor’s degree, including general management (No. 3) accounting and auditing (No. 4), marketing research analysis and marketing, (No. 5), finance (No. 6), management analysis (No. 8), business operations (No. 10), information systems (No. 18) and personal financial planning (No. 20).
Numerous schools, including my employer Shippensburg University, are already preparing students for each of those eight specialties.
At Shippensburg, for example, accounting degree recipients are in the top 40 programs in the nation for passing the CPA exam for first time takers. The Supply Chain Management program is one of the most successful undergraduate programs, with an estimated 100 percent job placement within three months after graduation. The MBA degree program is ranked in the top 267 AACSB accredited programs by the Princeton Review.
What’s more, these jobs pay better than jobs not requiring degrees.
Public colleges and universities help drive the economy in many ways, but perhaps most important is preparing people for workforce needs.
John Kooti is a professor of finance and dean of the John L. Grove College of Business at Shippensburg University. His email is JGKooti@ship.edu.