In 2005, inflation hovered at 3 percent with increases fueled by higher oil prices. The CBO predicts lower inflation in 2006: a 2.5 percent increase in prices. The Professional Forecasters' prediction is slightly lower, at 2.4 percent.
Unemployment Stable to Improving
Last year was hard on domestic automakers. General Motors was downgraded to junk bond status, and the auto industry had the highest number of layoffs of any industry – more than 100,000 jobs in 2005, as reported by Reuters.
Despite these job losses, the forecasts predict stable or decreasing unemployment in 2006. The CBO estimates an unemployment rate of 5.2 percent, the same as the 2005 estimate. Fed forecasters predict the job market will improve, with unemployment falling to 4.9 percent.
|OVERALL U.S. FORECASTS*|
|Congressional Budget Office||Federal Reserve Bank's "Survey of Professional Forecasters"||The Economist magazine|
|Real GDP Growth||3.7%||3.4%||3.6%||3.4%||3.6%||3.3%|
|•3-Month Treasury Bill||3.0%||3.7%||3.2%||4.5%||4.2%||n/a|
|•10-Year Treasury Note||4.3%||4.7%||4.3%||5.1%||4.5%||n/a|
|Budget Deficit (as % of GDP)||-2.7%||-2.4%||n/a||n/a||n/a||n/a|
|* Note: 2005 data based on most recent actual figures. 2006 data are most recent projections.|
|CONGRESSIONAL BUDGET OFFICE ESTIMATES OF DOD SPENDING ($ BILLIONS)|
|Source: HispanTelligence®‚ calculations using data from Tables 1, 2, and 4 in "Estimated Costs of Continuing Operations in Iraq and Other Operations of the Global War on Terrorism," Congressional Budget Office.|
|California||Housing slowdown with accompanying reductions in consumer spending and job losses in real estate-related industries.||UCLA Anderson Forecast|
|Texas||Expected growth in manufacturing sector, durable good growth larger than in non-durables, and increases in Texas labor force.||Texas Manufacturing Outlook Survey|
|Florida||Economic damage from hurricanes, but stimulus with re-building; employment growth, but larger population growth.||Econocast, Fishkind & Associates, FL|
|Hispanic Sector Vitality Sparks Marketers' Interest|
The charm of the U.S. Hispanic market lies partly in its purchasing power growth – about 9.71 percent in 2005, according to HispanTelligence®. And though this growth is expected to slow, to about 6.8 percent in 2006 – bringing Hispanic disposable income to about $820 billion – that's still stronger than projected growth for the market overall. (For details on the dynamics of Hispanic market growth from HispanTelligence, see "Energized Demographic in a Slow Economy," at http://www.hispanicbusiness.com/go/energized/ )
This continues a trend market planners haven't ignored. Yankelovich Inc., a leading marketing research and consulting firm, emphasizes in its predictions for 2006 that the Hispanic market is "a main driving force" and "catalyst for growth" in the American economy, destined to receive heightened attention from marketers this year and beyond.
Hispanic Business asked Sonya Suarez-Hammond, Yankelovich's director of multicultural marketing, to expand on these predictions. Her response – "The New Cachet of Being Hispanic," at http://www.hispanicbusiness.com/go/cachet/ – cites research-based findings and statistics reported in the 2005 Yankelovich MONITOR "Multicultural Marketing Study."