Another macroeconomic question answered
I was asked how long it would be until the result of this year's economic stimulus package would be evident.
"The National Association for Business Economics just said it'll be the second half of the year"
Because I'm not a member, and don't have the cash to spare to join, I'm afraid I have to rely on media reports. According to the Wall Street Journal:
“Following a sharp 5.0% (annual rate) contraction in the first quarter of this year and another 1.7% drop in the second quarter, NABE forecasters expect real (gross domestic product) to rise at a sub-par 1.6% rate in the second half,” said Chris Varvares, president of NABE as well as the forecasting firm Macroeconomic Advisers.
“The good news,” Varvares added, is the economy in 2010 “is expected to see modestly above-trend growth of 3.1%.”
A combination of factors should fuel the 2010 recovery. For one, an end to the drags on housing, consumer spending and business investment should add to growth, as should inventory building. In addition, the recently enacted fiscal stimulus package should boost the economy, although NABE economists were divided on just how much juice it will add.
However, the write-up on Bloomberg makes it look like the only ray of sunshine out there is the stimulus package:
Consumer spending, which accounts for more than 70 percent of the economy, is projected to decline 1.3 percent this year, compared with a 0.2 percent drop forecast in the November survey.
Economists cut 2009 projections for auto sales to 10.9 million from the 12.5 million projected in November.
Builders will break ground on 630,000 homes this year, the fewest in 50 years of record-keeping and less than the 870,000 starts projected in the November poll. Still, participants predicted home sales would reach a trough by the middle of the year.
Eight out of 10 economists projected the stimulus plan signed into law last week by President Barack Obama would contribute at most a 1 percentage-point boost to gross domestic product this year.
Seeing two different Wall Street publications give such differing write-ups makes me wish I was a member. But not enough to spring $150 to get the report straight up.
Still, it sounds like economists with the time to crunch the numbers expect the economy to turn up in the July to September time frame -- and that the stimulus package may be as much as 2/3 of the reason.
"The National Association for Business Economics just said it'll be the second half of the year"
Because I'm not a member, and don't have the cash to spare to join, I'm afraid I have to rely on media reports. According to the Wall Street Journal:
“Following a sharp 5.0% (annual rate) contraction in the first quarter of this year and another 1.7% drop in the second quarter, NABE forecasters expect real (gross domestic product) to rise at a sub-par 1.6% rate in the second half,” said Chris Varvares, president of NABE as well as the forecasting firm Macroeconomic Advisers.
“The good news,” Varvares added, is the economy in 2010 “is expected to see modestly above-trend growth of 3.1%.”
A combination of factors should fuel the 2010 recovery. For one, an end to the drags on housing, consumer spending and business investment should add to growth, as should inventory building. In addition, the recently enacted fiscal stimulus package should boost the economy, although NABE economists were divided on just how much juice it will add.
However, the write-up on Bloomberg makes it look like the only ray of sunshine out there is the stimulus package:
Consumer spending, which accounts for more than 70 percent of the economy, is projected to decline 1.3 percent this year, compared with a 0.2 percent drop forecast in the November survey.
Economists cut 2009 projections for auto sales to 10.9 million from the 12.5 million projected in November.
Builders will break ground on 630,000 homes this year, the fewest in 50 years of record-keeping and less than the 870,000 starts projected in the November poll. Still, participants predicted home sales would reach a trough by the middle of the year.
Eight out of 10 economists projected the stimulus plan signed into law last week by President Barack Obama would contribute at most a 1 percentage-point boost to gross domestic product this year.
Seeing two different Wall Street publications give such differing write-ups makes me wish I was a member. But not enough to spring $150 to get the report straight up.
Still, it sounds like economists with the time to crunch the numbers expect the economy to turn up in the July to September time frame -- and that the stimulus package may be as much as 2/3 of the reason.