The economic outlook for the United States in 2015 looks solid, though longer term forecasts must wrestle with the question of when the next recession will occur.

A downturn is likely to come from an error by the Federal Reserve, as I explained in “The Next Recession: Cause and Timing.” However, 2015 is safe, because the Fed has yet to begin tightening. (The end of Quantitative Easing is not tightening.) The first possible Fed error, tightening too soon and too aggressively, would put 2017 or 2018 in jeopardy. The time lag between Fed action and a recession is about one year, so tell me when the Fed starts to overtighten and I'll tell you when the next recession begins.

The alternative Fed error is to tighten too late. In that case, we first get an acceleration of inflation and then the Fed slams on the brakes. This sort of recession would be harsher than the Fed-tightens-too-soon recession, but it wouldn't start until 2017 or 2018. The third possibility is that the Fed gets it right, in both timing and magnitude. Perhaps they are smart enough, or perhaps they are lucky enough.

The rest of this forecast assumes that the Fed gets it right. The reader can then superimpose a recession at whatever time seems most appropriate. I am not sure which error, if any, the Fed will make. I'm nervous, but not confident in anyone's ability to figure out when the next recession will come.

The economic outlook if the Fed does not trigger a recession is quite positive and gets better as time goes by. My own forecast is stronger than my colleagues' projections, which I think is due to my greater optimism about housing construction, business capital spending, and reduced energy imports.

Consumer spending is likely to grow just in pace with the economy. Few consumers are stretching beyond their incomes, and few are withdrawing from spending. As incomes rise, their spending rises at about the same rate. I see this continuing.