2016 Financial Predictions From WalletHub

Making predictions for a normal year is risky enough, but making predictions for an election year has got to be even riskier. Who knows how the pendulum will swing until the election, and then there are less than two months for the economy to react. There should be plenty of excitement.

The folks at WalletHub, a website that includes “all the tools and information consumers and small business owners need to make better financial decisions and save money,” has stuck its neck out with 10 predictions for 2016. The company claims a grade point average of better than 3.0 for each of the past 4 years. Here’s the list.

1. U.S. GDP Growth of 2.4%, Below Global Average of Around 3%
2. U.S. Will Approach “Full Employment”
3. S&P Will Close 2016 at 2,188
4. U.S. Auto Sales to Approach 18 Million
5. Oil Prices Post Modest Rebound
6. Federal Reserve Will Raise Interest Rates Once in 2016 to Median Target Rate of 0.625%
7. Housing Market Will See Slower Growth, Higher Costs
8. Credit Availability Will Contract as Rates and Defaults Rise
9. Medical Records to Become Increasingly Attractive Target for Identity Thieves
10. Fannie Mae and Freddie Mac Will Dump FICO Scores

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WalletHub also asked several economists to reply to the question: “What will be the biggest economic themes for 2016?” Here are a few answers:

Allen R. Sanderson, Senior Lecturer in Economics, University of Chicago:

I think it’s going to be a rather boring—and boring is good—in terms of economic growth (2%), inflation (1%), unemployment (5%). As to the stock market, steady but slower-than-normal growth.

Julie Heath, Economics Chair at Lindner College Business, University of Cincinnati:

The continuing effect of the strong dollar and China on the American economy. … The labor market will continue to be a theme. The unemployment rate will drop even further, perhaps down to the mid-4’s, although probably more slowly as the slack in the labor market is taken up.

Katherine Waldock, Ph.D. candidate at the NYU Stern School of Business:

As of the time of this writing, prediction markets indicate that Hillary Clinton will be the Democratic nominee [for U.S. president] and Marco Rubio the Republican nominee. It’s hard to imagine that markets will respond drastically to a Clinton win. There is more uncertainty around the economic impact of a Rubio win, which would manifest higher volatility.