Economic Forecast

[BWS]

Just thought that this article may interest some of you. It is taken from the University of Michigan (GO BLUE!). So, as ive said, this may interest some of you and because of that I have copied the article. Does anyone have any input on this? Just looking for some feedback I suppose.

U.S. economy will add more than 5 million jobs in the next two years

ANN ARBOR, Mich.—Riding the wave of recent job gains and robust economic growth, the American economy should remain strong throughout 2004, according to a new economic forecast by the University of Michigan.

U-M economists predict 5.1 percent growth in national economic output (as measured by real Gross Domestic Product) next year—the strongest annual growth rate since 1984.

"The economy starts the year 2004 with substantial momentum, propelled by real GDP advancing at a 5.8 percent rate in the second half of 2003," said Saul Hymans, U-M professor of economics. "The pace of output expansion remains vigorous next year and employment responds to the strong economic growth."

In their annual forecast of the U.S. economy, Hymans and colleagues Joan Crary and Janet Wolfe predict employment growth of 2.1 million jobs in 2004 and 3.1 million in 2005. Unemployment is expected to fall from 6 percent this year to 5.4 percent next year and to 4.8 percent in 2005.

"The past three months have produced 286,000 new payroll jobs—the best three-month performance since January 2001, back before the recession," Hymans said. "And in response to three straight quarters of really sparkling economic growth, job gains move into high gear to generate more than 800,000 jobs in the first quarter of 2004 and remain strong over the next two years."

While the outlook on the employment front is positive for 2004 and 2005, inflation and interest rates will edge upward in the next two years, Hymans and colleagues say.

Core inflation remains low for another year, but rises slightly from 1.5 percent this year to 1.8 percent next year, before jumping to 2.7 percent in 2005, the report predicts.

"Interest rates move up slowly during 2004, but somewhat more intensely in 2005 as the Federal Reserve responds to the gathering inflationary momentum," Hymans said.

The conventional mortgage rate will rise from 5.8 percent this year to 6.1 percent in 2004 and to 6.3 percent in 2005. The rate for three-month Treasury bills will increase from 1 percent this year to 1.6 percent next year and to 3.2 percent in 2005, while the 10-year Treasury bond rate moves up from 4 percent in 2003 to 4.7 percent in 2004 and to 5 percent the year after.

The U-M forecast, which is based on the Michigan Quarterly Econometric Model of the U.S. Economy and compiled by the U-M Research Seminar in Quantitative Economics, also calls for:

• Declining energy prices (both crude oil and gas fuels), which will fall 19 percent in 2004 and nearly 7 percent in 2005.

• Fewer private housing starts, down from this year's 1.81 million units—the highest annual total since 1986—to 1.75 million next year and 1.7 million the year after.

• Rising sales of light vehicles, increasing from 16.5 million units this year to 16.9 million in 2004 and to 17 million in 2005.

• Higher consumer-spending growth, rising from a 3.1 percent increase this year to 3.9 percent next year, before slipping back to 3.7 percent for 2005.

[Dagodevas]

I knew the economy wasn't going to be a big issue on 2004. Now all Bush needs to do is find those WMD and he's set.

[RedSkunk]

he's already set. there isn't even a reason to hold an election next year.

[BWS]

At 12/10/03 08:03 PM, RedSkunk wrote: he's already set. there isn't even a reason to hold an election next year.

You know, I wonder who will actually run for the Democrats in the Primary. They need to get someone good unless they want him to be elected again.

Anyways, this is off subject a bit. I really want to see what people have to say about this article because I rarely post them, and I usually never give sources for things that I say.

[Commander-K25]

But didn't Bush "ruin the economy"? Wasn't this the "Bush Recession"?

That's what the news media told you and many believed it but as I said all along, this was just an economic cycle and sure enough we're coming out of it.

[Thanatopsis]

At 12/10/03 10:31 PM, Commander-K25 wrote: But didn't Bush "ruin the economy"? Wasn't this the "Bush Recession"?

That's what the news media told you and many believed it but as I said all along, this was just an economic cycle and sure enough we're coming out of it.

i would agree that this wasnt all Bush's fault but he sure didnt do anything to speed up the healing prosses but hopefuly it will keep the market from growing to fast so that this takes longer to happen again, other wise we will be overhyping the wrong type of economic growth we shouldnt just look at the stock market like everyone was before the resesion for the most part but at the nations industries also.

[BWS]

Well, yaaaa. Thats kinda what they did to compile the data listed above.

Also, although Bush spent like a brotha on payday, he did help a bit through his tax cuts and stimulus package.

[RedSkunk]

At 12/10/03 10:42 PM, theredgoatee wrote: ...we shouldnt just look at the stock market like everyone was before the resesion for the most part but at the nations industries also.

but wasn't the stock market way over-speculated as a result of corporate scandal and meaningless .com companies?

[RydiaLockheart]

I noticed that the Dow hit 10,000 yesterday, too. I think it's too soon to see whether or not we're coming out of a recession, though. I want to see if this was just a single event or part of a trend.

[BWS]

At 12/11/03 12:21 AM, Rydia_Lockheart wrote: I noticed that the Dow hit 10,000 yesterday, too. I think it's too soon to see whether or not we're coming out of a recession, though. I want to see if this was just a single event or part of a trend.

The Dow is a just an index based on the economic statistics that would be used, partially, to actually examine the state of it. We dont base our opinions on the economy by that, instead, the Dow is indexed by what we do use as economic indicators. So, the Dow isnt an indicator; the Dow is based on indicators. Just a lil FYI I suppose.

And howdy Rydia =p

[BWS]

At 12/11/03 12:21 AM, Rydia_Lockheart wrote: I noticed that the Dow hit 10,000 yesterday, too. I think it's too soon to see whether or not we're coming out of a recession, though. I want to see if this was just a single event or part of a trend.

Like I said, it is simply a representation of our performance. Since the composite has stayed over 10,000 for three weeks, I decided that I would bump this thread. Disclaimer: the index is not really implying a damn thing as far as long term outlook is concerned.

[BWS]

*Bump #2*

So, what is your input on the subject? I am curious to see what others have to say about the state of our present economy, and its present momentum.

[HeinousAnus]

our economy? it is a joke, at least since bush took office. i mean it is kind of comparing apples and oranges when i say clinton was much better than dubya, being the most economically prosperous president in the history of our nation, and bush, a man who, well i won beat around the "bush" hes a dumass

[BWS]

At 2/27/04 02:46 PM, HeinousAnus wrote: our economy? it is a joke, at least since bush took office.

Have you ever stopped to think that this may be association instead of causation? The economy works in a cyclical fashion, and would have had a downturn despite who held the office. Also, care to say why it is a joke? You say "it is" in present tense, so please explain your reasoning.

[EefOofClock]

:and I usually never give sources for things that I say.

I DON'T BELIEVE YOU! OUR ECONOMY WILL CONTINUE TO FALL UNTIL WE HAVE ANOTHER DEPRESSION AND STAY THERE! YOU LIAR!

I think that we should look at the worlds other economic systems, such as Britains for example, and mold our economy into a slightly different shape. For example, Britains tax is 13%, buuuut their health services are free. We could also look at the really bad economies and try and mold our economy into somewhat of an antithesis (great new word) of that economy. I think that we are too self-absorbed into our own economic settings that we fail to see what the rest of the world is trying to achive.

Instead of making new jobs we need to confront the issue of social adapting to try and socialize with the rest of the world. It's like the group at school that keeps their noses in their books and never socialize, who grow up and stay in their "own little world". American is the kid with his nose in his book. Sure, America is doing a lot for its citizens/servents, but we could have more freedom than we do. Kudos for the government for being able to handle such a difficult task, but thumbs down to them being so selfish.

As Confucious says "The end of the day is near when small men make long shadows."