Towards the end of 2011, a range of key US economic data continued to improve, suggesting that the US economy is likely to continue to recover in 2012, albeit at a pace that remains well below the long-term average. This improvement in data includes consumer confidence and indicators of consumer activity, employment data as well as fixed investment activity (spending on durable goods). Off course, severe economic and political problems remain, including the weakness in the housing market as well as the need for a coherent fiscal austerity programme.
While the US economic recovery in 2012 is far from assured, and likely to remain constrained by current developments in the Euro-area, it is interesting to see that at the start of 2012 none of the 72 economists surveyed by Bloomberg expect the US to return to recession conditions within the next 18 months.
The median US GDP growth forecast for 2012 has been revised slightly higher to 2.3%, rising to 2.4% in 2013. This compares with an expected growth rate of 1.8% in 2011. The most optimistic estimate is for growth of 3.9% in 2012 (Parsec Financial – a wealth management company in the US), while the most pessimistic is a growth rate of 1.3%. The high and low growth estimates for 2013 are 4.5% and 1.4% respectively. The most accurate forecaster of US GDP, which is UBS (based on historical data compiled by Bloomberg) currently expects the US to grow by 2.1% in 2012 and by 2.6% in 2013.
As mentioned above, the consensus forecast estimate for 2012 have been revised up a little over the past few months. For example, in October 2011 the consensus GDP forecast for 2012 was 2.0% (now 2.3%). While the upward revision is marginal, the direction is important given the extreme anxiety that some research institutions expressed just three or four months ago. In fact, some research entities indicated in September that the US will “definitely” experience a recession.
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