February 12, 2020

Growth in the national economy will remain moderate in 2020

The longest U.S. economic expansion in history is expected to continue in 2020, though at a somewhat slower pace. The economy is projected to add an average of 140,000 jobs each month during 2020, down from an average monthly gain of 175,000 jobs in 2019. Still, that will be sufficient to keep the national unemployment rate south of 4 percent and near a five decade low.

Consumers will continue to be the driving force behind the economy. Consumer confidence remains elevated, and the healthy labor market will continue to support additional spending. Household balance sheets are also strong, with wealth at a record high and debt burdens at multi-decade lows.

Restaurant operators are on the front lines of the economy, and most are anticipating a more-of-the-same business environment in 2020. When surveyed in January 2020, six in 10 operators said they expect business conditions in six months to be about same as they were in January. Twenty-two percent thought business conditions would improve, while 16 percent expected conditions to worsen.

External risks and geopolitical uncertainties remain, headlined by the trade war with China. Though the signing of the Phase One trade deal eased tensions somewhat, any re-escalation risks hurting U.S. consumers and the economy as a whole.

2020 forecasts of key economic indicators:

Key Takeaways: Growth in the national economy is expected to slow somewhat in 2020. Real Gross Domestic Product (GDP) – the value of goods and services produced in the United State – is projected to increase 2.0 percent in 2020. While still positive, the projected 2020 gain would represent the 15th consecutive year in which the U.S. economy grew below 3 percent.

Key Takeaways: The national economy is expected to add jobs for the tenth consecutive year in 2020. However, the projected 1.3 percent increase would represent the slowest gain since the first year of that streak. Still, with a projected average monthly increase of 140,000 jobs during 2020, the growth will still be sufficient to absorb new entrants to the labor force.

Key Takeaways: While households will continue to see their incomes rise in 2020, the growth is expected to be down from recent years. Real disposable personal income is projected to increase 2.2 percent in 2020, which would be the slowest gain since 2016. Still, continued income growth is a key driver of spending on food away from home.

Key Takeaways: Inflation is projected to remain generally contained in 2020, with average consumer prices rising 2.0 percent. Despite the modest uptick from 2019’s growth, 2020 is expected to represent the ninth consecutive year with an inflation rate below 2.5 percent. This hasn’t happened since the 1930s.

Read more analysis and commentary from the Association's chief economist Bruce Grindy.