Although the nation’s economic expansion slowed somewhat from the torrid pace of the previous six months, the Commerce Department recently reported that U.S. GDP grew by 2.6% in the fourth quarter of 2014.1 And while there were indications of significant drags on the country’s economy during the last stanza (mostly due to a decrease in defense spending and weakening exports), these were more than outweighed by the best consumer spending growth in almost a decade2 and nearly one million new jobs added to payrolls during this period.3

Because our economic indicator data also showed improvement in nearly every category during the fourth quarter of 2014, it appears that both our local and national economies are poised for accelerated growth in 2015.

By the end of the 2014, there appeared to be growing consensus that the U.S. economy had arrived at a turning point. Despite an alarmingly slow start (in which first quarter GDP shrunk by 2.1%), the economy had averaged 2.4% growth per quarter by the end of 2014, and most analysts are now predicting 2015 rates from 3.0% to 3.5%. Likewise, despite the economic slowdowns among our overseas trading partners, there appears to be sufficient strength within the domestic economy to somewhat offset the resulting trade imbalance (which is estimated to have reduced the fourth quarter 2014 GDP by a full percentage point, and could still affect subsequent revisions in the coming months).4

Turning to our fourth quarter 2014 survey of local indicators, our area economy also seems to have ended the year on a positive note, with nearly every data category showing improvement over the same time last year. As has been the case in several consecutive reports, unemployment continued to plummet in both Toledo and Lucas County, and local consumers picked up the pace of their purchasing, with surging auto sales yet again leading the way.

Like the national trends, our economic indicator data still showed a couple of sectors lagging the recovery of our local economy during the fourth quarter and throughout much of 2014. In my Q4/13 report one year ago, I suggested that our local labor market was still recovering jobs and wages at a slower pace than the rest of the country. Twelve months later, after dramatic drops in the local unemployment rate, our area seems to have closed the joblessness gap. But like the rest of the country, the impressive job growth hasn’t yet led to a substantial increase in wages, which in 2014 barely grew faster than inflation.

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