The UCLA Anderson Forecast fourth quarterly release of 2014 foresees the U.S. economy likely growing at a 3% pace during the next two years, as lower oil prices and higher wages bolster consumer spending and the unemployment rate falls to 5%. Along with consumer spending, aggressive corporate spending in equipment and software will fuel this growth.

The UCLA Anderson Forecast is predicting that the weak growth rates of 2009-2014 that hovered around 2% are in the past, as the economy ramps up to a sustained period of 3% growth in real GDP. “Specifically, we are forecasting 2.8% growth in the current quarter and anticipate growth to average 3.1% in both 2015 and 2016,” said senior economist David Shulman, the author of the national forecast. He added that this growth will bring “a sense of economic progress on Main Street,” a feeling not necessarily brought on by the tripling of stock prices since the lows of March 2009.

Shulman reports that the economy will generate 200,000–260,000 jobs monthly, reducing the unemployment rate to 5% by the end of 2016. Employment compensation will rise to 3.2% this year and next and 3.9% in 2016, besting an annual average of 1.8% between 2009 and 2013.

The recent drop in oil prices will have a significant impact on the national economy as well. After trading at $100 per barrel most of the year, prices have plummeted to $75 per barrel. “Should the oil price remain at this level, and we expect it will, there will be huge benefits to consumers,” said Shulman. “For example, such a price reduction translates to at least 50 cents-a-gallon price cut for gasoline. With the U.S. consuming about 135 billion gallons of gasoline a year, that calibrates into a $67 billion a year boon to consumers.” Shulman noted that there is a downside to lower oil prices, as more than half of the consumer benefit will be absorbed by U.S. oil producers. That, in turn, will affect incomes, employment and capital spending in domestic oil producing regions, many of which have had the fastest growing economies in recent years.