Consensus Outlook for Economy Not So Troubling

I know I’m supposed to find this troubling:

Economists Downgrade U.S. Recovery Outlook in Survey

May 12 (Bloomberg) -- Economists downgraded their projections for a recovery from the deepest U.S. recession in half a century, now seeing the jobless rate exceeding 8 percent through 2011, a Bloomberg News survey showed. . . .

Except that the consensus now looks for real GDP growth to resume next quarter, which means the slowdown is on the verge of being over.

And the unemployment rate is supposed to peak next year at 9.6%.

By that measure, at least, the current recession doesn’t figure to even be as bad as the one in 1982, when unemployment topped 10%.

For that matter, I don’t buy expectations of sluggish growth in the out years.

Who really knows? Economists have enough trouble getting what will happen next quarter right.

Comments

[PastTense:]

"And the unemployment rate is supposed to peak next year at 9.6%.

By that measure, at least, the current recession doesn’t figure to even be as bad as the one in 1982, when unemployment topped 10%."

This is not correct. In recent years the federal government has changed both how it measures unemployment and how it measures inflation--so the numbers appear much more favorable than they actually are. See:
www.shadowstats.com/

May 13 02:25 AM

[UbuTranscen...:]

.
Matt,

I heartily agree with your statement: "Economists have enough trouble getting what will happen next quarter right."

After all, the overwhelming majority of those same folks absolutely failed to see the great bubble collapse of 2008, even after on-the-job training in 2001-2002 and a warm-up lap in 2007.

Based on their past track record as a group, the probability that the certified prognosticators are right about real GDP growth resuming next quarter and unemployment topping-out at only 9.6% seems mighty, mighty slim.

In fact, I'll wager that a seasoned pony bettor would size up those odds and bet that whatever happens, it WON'T be what the the consensus of economists predict.

Gotta go, maybe Intrade.com has odds for that and I've got $2 burning a hole in my pocket...

Ubu.

May 13 02:37 AM