http://www.forbes.com/sites/kitconews/2014/01/10/economists-see-3-gdp-growth-falling-jobless-rate-in-2014/
In this article, economists Diane Swonk and Douglas Holtz-Eakin share why they are optimistic about 2014. Swonk states that the second half of 2013's momentum was "not not a fluke" and that the rise in business investment should continue in 2014 as supply chains are rebuilt. As a result of this, she expects millions more jobs to be created.
Holtz-Eakin agreed with Swonk but noted that the politics in Washington are restricting growth. He predicted a DOW growth of 5% which is close to the growth in GDP. Also, he predicts some sources of stability arising from the FED stabilizing stock growth and miners cutting back on gold production.
I am a little skeptical that the US economy will experience considerable growth in 2014. It is possible, however, that we will see 3% GDP growth, which is what Janet Yellen is hopeful for. However, there are economic and political problems that could hinder GDP growth. For example, it is possible that we could have another Washington gridlock that will worry the stock market. Also, the Chinese economy is starting to restructure with new economic policies, and with slowing Chinese growth, we may see US GDP growth slow as well.
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ReplyDeleteI also am optimistic for the new year, however, I think that we still need to be cautious. Another article I read discusses this in more detail:
ReplyDeletehttp://www.economist.com/news/leaders/21592613-good-news-about-global-growth-risks-pushing-interest-rates-up-and-politicians-appetite-reform
As a whole, the United States is leading the recovery, but topics like long-term unemployment are still a difficult issue.
The CPI rose by 0.3% where wholesale prices rose by 0.4%. 74,000 jobs were added last month and the jobless claims have been reduced by 2000. The policymakers have reduced in purchasing monthly bonds which indicates an improvement in job market. The house sales too have increased. Thus the future economy outlook does look optimistic but it is too early and the figures aren't great enough to exactly predict.
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