Academic journal article The Journal of Business Forecasting

The Nation's Economic Outlook

Academic journal article The Journal of Business Forecasting

The Nation's Economic Outlook

Article excerpt


The Consensus Outlook remains positive despite the plethora of negative press reports. In light of the ubiquitous chagrin regarding oil prices, pervasive threats of terrorism, and natural disasters, the Consensus Outlook remains on track reporting positive growth through well into next year (2007). In fact, resilient would be the best characterization for the nation's economy. Undoubtedly, the world's largest economy has enough momentum to weather any storm on the horizon. Moreover, the subdued growth that is expected should bode well with those who are concerned chiefly with surfacing inflationary pressures. The bottom line is that this economy is well entrenched and will continue on a steady-albeit subduedpath in the foreseeable future.


The average consumer in the United States delights in continued spending. Even with rising gas prices and interest on accumulated debt, U.S. households are expected to continue to spend, although at a slower rate than witnessed in previous years. Personal disposable income and personal consumer expenditures are projected to grow at roughly a 4-percent rate over the forecast period. Job growth continues strong. The Consensus projects a slight increase in the nation's unemployment rate, which is still at a historic low. New car sales are expected to remain at the 16 million units, certainly a decent showing. Housing starts are projected to be around 1.8 million units, casting doubt on the often-cited housing bubble ready at any time to burst. The bottom line suggests that consumers, while concerned about oil prices, possible terrorist attacks, and the like, are not going to abandon their desired standard of living anytime soon.


The business side of the equation also remains upbeat. The penchant of businesses in the United States for more efficient operations and unwillingness to lose market share will keep them focused on moving forward in a methodical and steady manner. Key business indicators point the way for this assessment. Nonresidential fixed investment is projected to grow at an approximate 4-percent rate, which is not bullish by any means, but it is certainly noteworthy surrounding the abovementioned events. …

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