Economic predictions have been rolling in for 2012, so I thought I would present a few basic economic predictions from various news and analytical sources. As a whole, most predictions lean toward subtle growth in the U.S. economy.
The U.S. economy is estimated to grow, though modestly, according to these sources:
- IHS Global Insight: 1.5% to 2.0%
- MSN Money: 3% to 3.5%
- Mark Zandi, chief economist at Moody’s Analytics: 2.6%
- Steven Ricchiuto, chief economist at Mizuho Securities USA: 2%
- Wells Fargo: 2%
- Philadelphia Federal Reserve Consensus Forecast: 2.4%
- University of Michigan RSQE: 2.4%.
Predictions for job growth and the unemployment rate were not as concrete, though most believed there would be some growth and unemployment would be virtually unchanged. The Philadelphia Federal Reserve predicted growth of 123,200 nonfarm payroll jobs per month, with an 8.8 percent unemployment rate. The University of Michigan predicts growth at about 140,000 jobs per month but with a slightly higher unemployment rate of 8.9 percent
Several of the predictions hedge themselves on uncertainty from international markets, especially Europe. However, the exact effect of a crash or near-crash of European markets is unknown. Housing prices are another unknown that could tip the scales. Mr. Zandi of Moody’s believes that housing could continue to drag down the economy. Robert Samuelson of The Washington Post believes that while conventional wisdom predicts slow growth in 2012, pent-up demand for homes and vehicles, coupled with decreasing consumer debt, could help the economy grow faster than predicted.
In general, predictions point toward 2012 being a year of modest growth. While more robust growth would be better, recent discussion of a “double-dip” recession seems to have subsided.