The Nation’s Economic Outlook

THE NATION’S ECONOMIC OUTLOOK By Jack Malehorn THE U.S. ECONOMY ... POSITIVE, BUT SUBDUED S S lower but sustained growth best describes the Consensus Outlook; however, it does portray a divergence of opinion in forecasts. The Consensus calls for a slow but continued growth through next year—a roughly 2% growth in real Gross Domestic Product (GDP). GDP is the most-often cited economic statistic deemed to provide the general sense of direction for the economy as a whole. Dr. Rajeev Dhawan, Director of Georgia State University’s Economic Forecasting Center, believes that the economy will continue growing during the forecast period because of the likelihood that the Fed will cut back interest rates to relieve weakness in the housing sector and ease liquidity concerns across the consumer sector. With that scenario, Dr. Dhawan projects a more favorable outlook for 2008 and beyond. THE CONSUMER SECTOR Representing approximately two- thirds of all economic activity, consumer activity has two key indicators: Disposable Personal Income and Personal Consumption Expenditures. Disposable Personal Income is expected to increase at a 4.2% rate over the forecast period, followed ...