Welcome to 2016: like last year, or maybe, a tad better.
The US and Massachusetts economies are on track to repeat their 2015 performance, with wages growing, consumer spending increasing, and unemployment ticking down this year, economists predicted.
"We will see a slightly better economy in 2016," said Nariman Behravesh, chief economist at IHS Inc., a forecasting firm in Lexington. "If you look at the underlying fundamentals of the domestic economy, they are solid."
Nationally, IHS expects the unemployment rate, 5 percent in November, to slide to 4.9 percent by the end of 2016 and the economy to grow by about 3 percent.
Massachusetts is likely to hit full employment this year, defined by local economists as an unemployment
rate of about 4.5 percent, said Alan
Clayton-Matthews, a Northeastern University economics professor.
Clayton-Matthews forecasts that unemployment will decline to 4.3 percent by the end on 2016, down from 4.7 percent in November.
The health care, technology, and education sectors that have bolstered the Massachusetts economy will continue to drive growth in the state, Clayton-Matthews said.
In November, consumer confidence reached its highest point since 2000 in Massachusetts, according to a survey by Mass Insight Global Partnerships, a Boston consulting and research firm. That should lead to greater household spending in 2016, boosting retail and service industries.
The improved national economy, meanwhile, should put more Americans on the road and in the air, helping the state's hospitality and tourism industries, Clayton-Matthews said.
But an aging and shrinking workforce, as more baby boomers retire, will slow the expansion as companies struggle to replace experienced and trained workers, he said.
Clayton-Matthews expects employment in 2016 to grow about 1.2 percent, compared with 2.2 percent in 2015. Overall the state economy is projected to grow by 3.1 percent in 2016, downshifting from the estimated 3.5 percent in 2015.
Many of the problems that dogged the US and Massachusetts economy in 2015 remain. Global growth is still weak, decreasing demand for US — and Massachusetts — goods in foreign markets such as Canada, Europe, and China.
In an article published Wednesday in a German newspaper, the International Monetary Fund Managing Director Christine Lagarde warned that global growth will be disappointing and uneven in 2016.
Add to that the Federal Reserve's decision in December to slowly raise short-term interest rates. Rising interest rates will make the dollar stronger, increasing the cost of US goods in other countries and hurting the sales of manufacturers, economists said. It will also mean higher borrowing costs, perhaps dampening spending by consumers and businesses.
Still, most economists don't expect the interest rate increase to significantly slow overall economic growth. The Fed has indicated that it will raise rates four times next year, a quarter point at a time, bringing benchmark rate to about 1.4 percent at the end of 2016.
"Even by 2017, interest rates will still be low," Behravesh said. "The Fed won't get in the way of the recovery."
Deirdre Fernandes can be reached at email@example.com.