Tags: economists | survey | 2.4% | GDP

WSJ Survey: Economists Forecast 2.4% Growth in 2013

Monday, 11 Feb 2013 08:40 AM

By Dan Weil

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Economists believe that economy will grow 2.4 percent, on average, this year, according to a group of 52 economists surveyed by The Wall Street Journal.

That compares with a 1.5 percent expansion in 2012. Economists had called for 2.4 percent growth then too.

One reason the economy lagged expectations last year was the cuts in government spending.

Editor's Note:
 
Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

“The biggest surprise is that under the Obama administration, reductions in federal-government spending have begun and will continue. Though not a big portion of real GDP [gross domestic product], it was surprise,” Allen Sinai of Decision Economics tells The Journal.

“This is now a theme going forward. It’s going to be hard … to get out of that rut now that fiscal restraint is entrenched.”

As for this year, “we’re definitely in a better place now than at this time last year,” Arun Raha of Eaton Corp., tells the paper.

That’s thanks to strength in the auto and housing markets. In addition, an improving economy in China and perhaps a bit in Europe should boost U.S. exports, he says.

“The best you can say about Europe is that it's not going to get any worse,” Raha notes.

Most of those surveyed believe the chance of a surprise that things are better than expected is higher than the chance of a surprise that things are worse than expected.

As for unemployment rates, the economists expect the rate to fall to 7.4 percent by the end of 2013.

Many economists don’t see the 0.1 percent contraction in U.S. GDP during the fourth quarter as indicative of the true condition of the economy.

“I’m not going to say growth is particularly strong, but this is not a recessionary signal by any means,” Paul Edelstein, director of financial economics at IHS Global Insight, tells Bloomberg.

“This really was a story about a payback in national defense spending. Consumer spending growth picked up, fixed investment was fairly strong.”

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

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