Last weekend, the USA Today reported the results of their quarterly economic survey, which polled 46 economists (including us). The results of the survey show economists have come full circle, changing their outlook for the economy from one of anemic growth in real GDP this year to a consensus of 3%.
Based on the results of the survey, we are still more optimistic than most, and there are key differences in our forecast. We expect Q2 GDP to be near 6%, almost double the 3.1% survey participants expect. We also see the Federal Reserve raising interest rates sooner and faster than most other economists. We also expect the CPI to rise throughout the rest of the year, not fall like the survey shows. And finally, we see the unemployment rate falling below 9% and toward mid-8% rates by the end of 2010 as the strong recovery continues.
While other economists are moving in the right direction, they still aren't as optimistic as they should be about the strength and resilience of our economy. As this morning's data on manufacturing and consumption show, the economic recovery, if anything, is picking up steam. The Federal Reserve contiues to be extremely easy, mark-to-market accounting is not an issue anymore, and the Panic of 2008 is over. The dogs are barking again and a V-shaped recovery is underway.
Source: USA Today