Despite a massive correction in much of the globe’s stock exchanges, U.S. gross domestic product could continue to grow at a reasonable 2.0 percent, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business.

“The key factor is that companies, despite the jittery stock market and poor results in earnings last year, will keep hiring,” Dhawan wrote in his quarterly “Forecast of the Nation,” released today (Feb. 24). “If they pause, income gains will slow and fretful households will save even more, causing a slowdown.”

For the second time in six months, China’s attempt to manage the devaluation of its currency sent shockwaves through global equity markets. Dhawan believes some nervousness surrounding the markets is warranted, but he called the current situation an overreaction.

“The markets are reacting like a petulant child to the promised fix of a monetary stimulus overseas that is failing to materialize soon enough,” Dhawan said.

The dip in the stock market will have a negative effect on consumer wealth, but nothing like the bursting of the housing bubble in 2008. In fact, falling oil prices will offset most of this negative effect, leading consumers to much better cash flow to start 2016 than at the same point in 2015.

In 2015, consumers used savings from low gas prices for big-ticket items such as vehicles, which sold 17.3 million units last year. As a result, retailers are feeling the pinch of the now frugal American consumer.

“The United States accounts for 25 percent of the world’s consumption, Europe another 25 percent. Combined, this big engine is not firing on all cylinders for Chinese-made goods,” Dhawan said. “Thus, the Chinese slowdown occurred as a result of our own rational action to consume fewer items they produce.”

He expects that the Federal Reserve will examine investment indicators at their April meeting, and if they are stable, the forecaster expects a June rate hike. After that, rates will stay put until after November.

Regarding the election, Dhawan says two candidates in particular would have a substantial impact on the economy if elected.

“If Donald Trump or Bernie Sanders wins,” he said, “it will drastically change tax policy outlook for coming years. Neither of these candidates seems susceptible to lobbying and the shock to boardroom confidence will result in lower capital expenditure spending and a concomitant growth stall.”