Bureau of Business Research
Date of this Version
Business in Nebraska, Volume 70, No. 715 December 2015
The divergence between the goods and service sector continues within U.S. economy. Goods producing industries such as manufacturing and mining continue to struggle in the face of a sharply higher U.S. dollar and low oil prices. At the same time, the consumer-driven service sector is growing at a solid pace, aided by rising employment, rising home prices, low interest rates and low gasoline prices. The net effect is moderate growth in the overall U.S. economy.
While weakness in manufacturing has potential to spread to the service sector, the more likely scenario is that the two sectors will continue to move in opposite directions during much of 2016. Weak economies in Asia and Europe will continue to promote a high U.S. dollar, limit growth in U.S. exports, and maintain weak commodity prices, all of which will yield continued stagnation in the manufacturing and mining industries. Yet, the service sector of the economy will continue to benefit from job growth, higher housing prices, low interest rates, and low energy prices.
Copyright 2015 University of Nebraska.