The Nation's Economic Outlook

THE NATION’S ECONOMIC OUTLOOK By Jack Malehorn THE NATION’S ECONOMY…STEADY AS SHE GOES The Consensus Outlook remains steadfast to a positive performance by the nation’s economy in 2006. Since mid-year 2005, the Consensus targeted solid growth despite the many distractions to the economy’s health. Clearly, 2006 will be subdued relative to last year. However, the present course charted allows an extended longevity of the current business cycle well into next year. The Consensus is calling for real growth in gross domestic product (GDP) near 2 percent. While less than a torrid pace, it should mitigate fears of surfacing inflation. No doubt the housing sector is anticipated to cool off considerably. Still, business investment plans and consumers’ willingness to extend their credit limits will keep the ship on course. CONSUMERS Anything short of a major disaster may be necessary to cool off spending by households. The Consensus Outlook reflects this exuberance by an anticipated healthy 4-percent increase in Personal Disposable Income and an accompanying 3.7- percent increase in Personal Consumption Expenditures. Recently, a great deal of attention has been focused ...