Posted on 05/09/2003 10:08:28 PM PDT by Starwind
Blue Chip economists trim U.S. growth forecast
Sat May 10, 2003 12:00 AM ET
WASHINGTON, May 10 (Reuters) - Private economists trimmed their forecasts for U.S. economic growth still further and now regard even the second half of 2003 with pessimism after a slew of data showed the U.S. economy still struggling to recover.The closely watched Blue Chip Economic Indicators newsletter said its panel cut growth forecasts for each of the next three quarters, extending the steady erosion in the survey's outlook that began last summer.
Gloomier still, nearly two-thirds of the more than 50 business economists on the panel said risks to their forecasts for growth in the second half of the year were on the downside.
"In large part, our panel members grew a bit more pessimistic over the past month because most of the latest economic releases and private sector survey results signaled that recent economic activity remained quite subdued," said the May edition of the newsletter. Blue Chip said its panel forecast a second-quarter growth rate of 2.1 percent, down 0.1 percentage point from the 2.2 percent projection offered in April.
Forecasts for the third and fourth quarters of the year were also trimmed by 0.1 percentage point, to 3.5 percent and 3.7 percent, respectively.
"The paring of consensus estimates of GDP growth over the remainder of this year reflects diminished expectations of growth in personal consumption expenditures, business inventories, capital spending and industrial production," Blue Chip said in a summary of its latest survey.
Its May forecast pegged 2003 gross domestic product growth at 2.3 percent, down from 2.4 percent projected in April and the 2.4 percent growth achieved last year. This was the fourth month in a row the panel has cut the annual forecast.
Disappointing employment and manufacturing data in April show the economy likely began the second quarter on a sluggish note, following a weaker-than-expected initial estimate of first-quarter GDP growth of just 1.6 percent, Blue Chip said.
While most analysts still expect the quick, decisive military victory by the United States in Iraq will produce a rebound in the pace of consumer spending and business investment, the panel was scaling back just how soon and by how much the pace of overall growth is likely to accelerate.
"Business inventories are not expected to grow as fast as originally thought due to lingering cautiousness on the part of businesses about the likely strength of aggregate demand going forward," it said.
The U.S. economy lost 48,000 jobs in April, notching the third consecutive monthly decline after a 124,000 reduction in March and 353,000 loss in February. "Indeed, payrolls have dropped in six of the last eight months," Blue Chip said, adding the plunge in weekly hours worked to a cyclical low of 34.0 a week was "particularly discouraging".
While the return of mortgage rates to their recent lows likely signals housing demand will remain reasonably strong for a while longer, cool weather and a very modest improvement in vehicle sales will likely leave April retail sales little changed from March, the private survey said.
Forecasting macroeconomic conditions and forecasting investor sentiment in a specific stock are vastly different crafts.
Why would they share 'this knowledge is power' tid bits with others.
It isn't power. They haven't said anything you couldn't glean yourself reading the news. They do it because they find it fulfilling and they paid for it - a job they enjoy, same as anybody. They put their pants on just like you and I.
Like a tumor.
(admin: I hope I'm allowed to post such a controversial suggestion)
The enemy is CONGRESS, never never never forget that their power is derived from taxing us and buying votes with our taxes.
CONGRESS is a business that is very successful. They have created a market which is the transfer of wealth and their engine of transfer is the power to tax. They buy their votes with taxes.
When Don Corleon "The Godfather" made money he provided a product the people would hand their money over for, willingly. Those that handed their money over to him did receive a product or service. Whom is more honorable, Don Corleon or Congress?
Disappointing employment and manufacturing data in April show the economy likely began the second quarter on a sluggish note, following a weaker-than-expected initial estimate of first-quarter GDP growth of just 1.6 percent, Blue Chip said.
Looking forward economically with knowledge the war is now over and oil prices are down considerably, DOW Theory experts now confirm the DOW move sustaining bullish support above all the major moving averages with Monday's futures currently up 100.
Willingly?
Don Vito Corleone: "I'm a gonna make a you an offer you can't refuse"
(1) 9-11. (2)Wall street meltdown. (3)Iraq. (4)SARS.
I'm confident W will make it right. Indeed, the last few days indicate that he is on the right path.
1.6% (where we're at) is anemic.
Consumers are optimistic.
And mercurial.
Spending on durable goods is still hefty.
No it isn't. It's below January levels. Just up from February which was an 'easy' comparison.
Home sales and new home construction remain strong and will grow now that winter is over.
Not likely grow. New mortgage apps have peaked and are declining. Re-fis are still strong.
Incomes are steady if not rising some. Consumer debt isn't exploding. Inflation is non-existent. Fuel prices are stable and falling. Incomes are not keeping pace with inflation which is definitley existent at 3%/yr. Fuel prices will rise as the dollar falls.
Consumer debt isn't exploding.
What planet are you on?
if the govt's would just quit taxing everyone to death there would be more capital expenditures by business.
If my grandmother had wheels, she'd be a wagon.
But it's only the single mother of nine that lost her minimum wage job you hear about in the news.
Yeah. All 448,000 of them in April.
Incomes are steady if not rising some. Consumer debt isn't exploding. Inflation is non-existent. Fuel prices are stable and falling.
Incomes are not keeping pace with inflation which is definitley existent at 3%/yr. Fuel prices will rise as the dollar falls.
Since government growth accounts for about all that growth. And clearly, not enough jobs are being created to replace the ones that are being lost to productivity increases and overseas outsourcing.
Coming out of such a protracted slump, it wouldn't be unusual to see growth as high as 8 percent.
Dubya always uses 911 as an excuse, but IIRC, the economy was already tanking hard before 911, and the stock market was testing new lows at the time -- something which may have influenced bin laden's timing. The economy actually did fairly well right after 911, because of all the liquidity added as a response to 911.
I'm confident W will make it right. Indeed, the last few days indicate that he is on the right path.
He's starting to say some of the right things in his economic speeches, but he's also still saying all the bad things to the point of contradicting himself. He's now including just about every economic theory ever know to man. But as the old saying goes, he who stands for everything, stands for nothing.
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