Bureau of Business Research


Date of this Version



Business in Nebraska, Volume 70, No. 716, June 2016


Copyright 2016 University of Nebraska.


The industrial and service sectors of the U.S. economy are once again on the same page. For the industrial sector, the related phenomena of slowly improving foreign demand and a stabilizing U.S. dollar have allowed manufacturing to expand again, albeit at a weak pace. At the same time, the service sector, supported by growth in consumer spending, continues to expand. The pace of service sector growth, however, has begun to moderate as the dividend from falling oil prices plays out. The net result is an economy moving forward, but likely to grow at a moderate rate.

Several other factors will contribute to moderate growth. The pace of job growth will inevitably slow given the ongoing retirement of “baby boom” age workers, and as the reserve of underutilized workers continues to shrink. This will limit growth in consumer income and spending. There also will be slow growth in demand from overseas. Most developed economies face the same demographic challenges as the United States. In addition, many developing countries face a need for significant structural reforms. China, for example, must continue to reign in excess spending on infrastructure and housing.