Despite volatility in financial markets, the outlook for the US economy has not changed much over the past three months, according to a report released today by TD Economics. Weak global growth remains a key headwind, but domestic demand continues to be supported by a healthy labor market and low energy prices.

Led by household and business spending, TD Economics projects US economic growth of 2% in 2016 and 2.2% in 2017.

“While this pace may seem underwhelming, it will be more than sufficient to continue to eat up slack in the American economy, maintain upward pressure on inflation and push the unemployment rate lower,” said TD Bank Chief Economist Beata Caranci. “The Federal Reserve will have good cause to raise rates two more times this year, even though market participants have currently sidelined those expectations.”

The most encouraging element in recent data has been the ongoing resiliency in the labor market, according to the report. Job growth over the first two months of 2016 averaged 207,000, similar to its progress since the recovery began.

“The good news does not end there,” Caranci said. “Drawn in by better job prospects, more and more people appear to be joining the workforce, heralding a more fulsome labor market recovery.”

With job growth expected to exceed 190,000 a month over the remainder of this year, TD Economics expects the unemployment rate to fall to 4.7% by the end of this year and hit a low of 4.6% in the second half of 2017.

TD Economics provides analysis of global economic performance and forecasting, and is an affiliate of TD Bank, N.A.