Remember the gloom-and-doom predictions surrounding federal budget sequestration? Gene Epstein of Barron’s does, and he devotes his latest “Economic Beat” column to the actual post-sequester record.
When President Obama himself warns the sequester will slow economic growth, you might expect the private sector to lower its sights and for economic forecasters to lower theirs. But according to the March 10 survey of 50 forecasters by Blue Chip Economic Indicators, the consensus forecast for economic growth barely changed from the month before. Real gross domestic product is projected to have grown at an annual rate of 2.1% in the calendar quarter just ending, and by 2.0% in the quarter about to begin. With some pickup expected in the second half of this year, fourth-quarter-over-fourth-quarter growth in 2013 is projected at 2.3%. Modest though 2.3% clearly is, it would put 2013 noticeably ahead of 2012, when fourth-quarter-over-fourth-quarter growth ran 1.6%.
The 10 most optimistic forecasters in the Blue Chip survey foresee growth of better than 3% this year, which would be the best performance since the expansion began in mid-2009—although that, too, would be no great shakes from a historical perspective. With continued improvements in housing, and with possible continued gains in employment not far below February’s solid gains, more forecasters might begin to share the optimists’ view.
