Economic Outlook for 2014
Fed economist shows optimism in battle of confidence vs. complacency
CHARLOTTE, N.C. -- It's been several years since anyone talked about consumer economic certainty, and the veil didn't lift during the first session of the SIGMA Annual Meeting on Tuesday. But Richard Kaglic, senior regional economist for the Federal Reserve Bank of Richmond, at least lit his outlook with a positive tone.
"There's a lot of uncertainty out there, and it does seem to be hindering decision-making," he said during the opening session of the conference in Charlotte, N.C.; however, Kaglic harkened back to a year ago, when President Obama had just been reelected and many businesses and investors were sitting on their assets amid a constant stream of negative outlooks in the media.
"Remember when we heard about the sequester back in March and how the economy was going to slide back into recession?" he asked. "When it didn't happen, people started to think, 'Maybe the government doesn't need to spend so much to grow the market. … Maybe this is just how Washington works these days'."
It was enough of a repositioning to grow the U.S. gross domestic product by 2.5% in 2013, but not enough to achieve a typical post-recession recovery rate of 5%.
"There's no real sign of an increase in investor risk aversion," Kaglic said. "Some might interpret that as market confidence, some as market complacency. But it's a sign that investors do not view what's happening in Washington with any real alarm."
For his part, Kaglic--speaking only for himself and not the Federal Reserve--said he expects "the economy to grow at a relatively slow percentage rate, maybe 2% to 2.5% for 2014," he said. "Modest, but steady growth with little to no inflation."
The Society of Gasoline Marketers of America (SIGMA) is a nonprofit, national trade association representing the independent motor fuel marketers and chain retailers in the United States. Its approximately 250 corporate members account for about 30% of the petroleum retail market, selling more than 56 billion gallons of motor fuel a year.