The Nation’s Economic Outlook

THE NATION’S ECONOMIC OUTLOOK By Jack Malehorn CONSENSUS CALLS FOR MEAGER GROWTH H H alfway through the year, the Consensus is predicting a slightly positive pace stretching out to mid-2010.While according to the Consensus some positive signs are surfacing, it is still a long way from a bonafide recovery as evidenced by projections for unemployment (remaining stubbornly high) and inflation (the absence thereof)—unusual events for a cyclical recovery. Nonetheless, a great deal of disparity exists within the forecast community. The Consensus is calling for real GDP to increase at roughly 1% plus. However, Rajeev Dhawan, Director of the Economic Forecasting Center at Georgia State University, has consistently predicted negative growth this year continuing well into 2010, and positive growth not accelerating until 2011 at the earliest. Dhawan believes that economic growth close to the potential trend line of 3% will not occur until 2013. He further points out that key to a strong and sustained recovery is capital spending, which is at present projected to be negative by many of the Consensus forecasters well into 2010. THE CONSUMER Disposable Personal Income is anticipated ...