Recovery gains some steam?

Yes, according to a Wall Street Journal survey of 51 economists.  We’re not out of the woods yet, but the survey suggests that many economists are raising their projected rates of growth for 2011.  Not that everything is completely rosy:

To be sure, the economy faces substantial challenges, including high foreclosure rates, rising commodity prices, strained state and local governments as well as the risk that financial tremors in Europe and geopolitical ones in Egypt could cut into growth. And despite the optimistic GDP forecasts, economists expect the unemployment rate will end the year at 8.6%—below January’s 9%, but still high by historical standards. . . .

While cuts by state and local governments are likely to subtract from growth in 2011, the economists don’t expect the drag to be strong enough to derail the recovery.

To dwell a bit on this last point:  The survey results suggest that we could make this problem a lot more manageable if we actually expanded aid to state and local governments for the coming year (maybe two) and worried about deficit reduction in 2013.  Of course that’s not likely to happen.  Anyway, the full WSJ article is here.

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