Report: Economy ready for strong growth in 2014

Despite cuts in government spending and payroll tax increases, the state and national economies are poised for solid growth in 2014 and 2015, a University of Tennessee report says.

Driving the growth are improved job creation, surging vehicle sales and a recovering housing market, according to the spring 2013 Tennessee Business and Economic Outlook.

“The economy has finally found a firm footing,” Matt Murray, associate director of the UT Center for Business and Economic Research and the report’s author, said in a news release “This will be the third year of payroll employment growth and a falling unemployment rate following the Great Recession.”

Nationally, payrolls are expected to grow 1.5 percent this year and 1.6 percent in 2014, the report said.

“These modest employment gains will help support modest reductions in the unemployment rate,” Murray said.

The report projects the national jobless rate will fall to 7.2 percent in 2014, compared to 7.8 percent in 2012.

Tennessee’s jobless rate is expected to drop to 7.5 percent in 2014, compared to 8 percent last year.

Vehicle sales are expected to total 15.3 million this year and 15.7 million in 2014, a substantial improvement from a low of 10.4 million in 2009.

As for the housing market, both prices and sales are showing improvement, the report says,

Although Tennessee’s jobless rate continues to trail the national average, the state economy outperformed the country in personal income nonfarm employment and manufacturing employment growth, according to the report.

Click here for the full CBER report.