As 2013 is coming to a close, North American new car sales have wildly exceeded even the most optimistic forecasts made at the beginning of the year. The burning question heading into next year is: will that trend continue? According to a new survey, favorable credit trends could keep it going.
While the Federal Reserve Board’s clear directives will keep market volatility in check to a certain extent, some experts believe that deflation could become a more serious issue.
In addition, fuel prices, an unpredictable feature of U.S. economic life for four decades, should remain relatively stable during the coming year.
“Interest rates will remain low for the foreseeable future due to the combination of record-low credit losses – with the exception of a single quarter in 2006, charge-offs are at the lowest level since 1995 – and the Federal Reserve’s commitment to retain current policies until more demonstrable economic improvement takes place,” said Odysseas Papadimitriou, WalletHub’s chief executive officer – who issued the survey.
WalletHub interviewed several economists in preparing its 2014 predictions, and the general consensus is that the economy will continue its slow growth in 2014, turning the year into the transitional period that 2013 should have been and bringing the economy back on track heading into 2015.
WalletHub noted some experts are predicting continued growth, while others feel that a significant correction is in order, but the best bet is that the stock market will continue to rise along with the economy in 2014.
The trend indicates that credit card users have drastically improved their ability to stay current on monthly payments as the economy has improved, thereby alleviating the uncollectible debt burden on banks. We expect that charge-off rates will continue to fall in 2014 before ultimately reaching a bottom and that overall credit score improvement will follow, he added.