Moody's Economist Zandi Sees US Economic Positives amid Gloom

Article excerpt

Mark Zandi, chief economist at Moody's Analytics, is 'optimistic' about the economy and sees unemployment trending down toward 8 percent by the end of 2012 as cyclical forces such as higher oil and food prices, as well as effects from the Japanese earthquake, begin to ease.

Chief economist Mark Zandi of Moody's Analytics is also cofounder of Economy.com. Mr. Zandi, an economic forecasting expert, advises politicians from both parties. He was the guest speaker at the June 28 Monitor breakfast in Washington.

The economic outlook:

"I am optimistic about the economy. Economic growth was about 2 percent in the first half of the year.... And I expect growth to accelerate to near 4 percent by year's end and into 2012 [at] about the same rate."

Why he is optimistic:

"Cyclical forces weighing on the economy's growth - including ... higher oil prices, food prices, and the Japanese quake effects ... - are lifting and [that easing] in fact will provide a boost to growth as we move toward year's end [and] into next [year]."

Risks to the economy:

"For my optimism to come to pass, a number of key assumptions have to hold. One is that $4 for a gallon of regular unleaded [gasoline] was the peak for the year.... If oil prices rise again, then I think my optimism would fade pretty fast. …

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