A business economics group has boosted its outlook for U.S. economic improvement this year and next, particularly for job growth.
The March report from the National Assn. for Business Economics forecasts more hiring, a lower unemployment rate, a lower inflation rate and more growth in consumer spending in 2015, compared with the group's forecast in December.
The report also predicts more investment by businesses in both equipment and intellectual property, as well as modest growth in stock prices.
"Healthier consumer spending, housing investment and government spending growth are expected to make outsized contributions to the projected acceleration in overall economic activity. Accordingly, recent labor market strength is expected to continue," John Silvia, the association's president and the chief economist at Wells Fargo, said in a statement.
Other factors driving the improved forecast include the strong dollar, continued low oil prices and increased activity in the housing sector.
The report predicts the benchmark price for crude oil, which fell from $98 a barrel in December 2013 to $59 in December 2014, will average $61 at the end of the year and $69 in December 2016. Just three months ago, the group forecast that oil would surge to $85 a barrel by December 2015.
The report did contain some negatives, however. Those include a widening U.S. trade deficit in 2015, a dip in 2015 hourly compensation growth from December's prediction to 2.5%, and scaled-back forecasts for 2015 corporate profit growth, down two percentage points to 4.7% from December's forecast.
Meanwhile, 88% of the panel of 50 professional forecasters predicted the Federal Reserve would start increasing interest rates in the second or third quarter of this year.
"The improved consumer spending outlook may be attributable to the psychological impact of lower gasoline prices, as well as improving employment and income growth," the report noted.