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

A CONCENTRATED FOCUS ON THE ECONOMY

A great deal of attention has been focused on the economy recently. Despite seemingly insurmountable market pressures, the Consensus Outlook predicts the economy will continue to trudge on. Watch any news show or read any publication and you become embodied with the feeling of despair and that the end is near. An incredible list of market concerns includes: fear of a mortgage market collapse and subsequent liquidity concerns weakening further the already-battered housing industry, concern of terrorism both nationally and in the global marketplace, wild stock market variations, volatile gas prices, and weather disasters ... individually and collectively have painted a somber outlook. Despite all of this, the participants of the JBF's Economic Consensus Outlook remain steadfast in their belief that the economy will continue forward into the year ahead, though at a slower rate. Accordingly, real GDP growth of roughly 2 percent is projected along with growth in disposable personal income of close to 4 percent.

THE CONSUMER SECTOR

By all indications, consumers are expected to remain active throughout the forecast period. Personal consumption expenditures are projected to increase at a rate of 3.3 percent. While not bullish, this suggests that, at least right now, consumers will not abandon past consumption patterns and consumer-driven inflation pressures will be subdued. In addition, the nation's unemployment is expected to remain flat but well within historic low levels of several years back.

New auto sales are also expected to remain at a relatively flat and subdued level of slightly above 16 million units. The housing sector-reflecting the earlier stated concerns-is expected to remain contained at or near the 1.4 million units a year during the coming year.

THE BUSINESS SECTOR

A fallout in the business sector is not expected. Non-residential fixed investment is projected to grow at a 3.3 percent rate. Capacity utilization rates are expected to remain flat at slightly above 80 percent. …

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