Home
|
Calendar Events
|
News
|
Product Definitions
|
Technical Resources
|
Green Building
DisplayPage
Keyword(s)
<< Back
Economists Express More Optimism Than General Public
[Source:
online.wsj.com
, July 15, 2010]
Economists surveyed by The Wall Street Journal are more optimistic about the direction of the economy than the general public, though they are revising down forecasts for growth and jobs for the next 12 months.
The majority (64%) of the 55 economists polled—not all of whom answer every question—said that the economy would get better over the next 12 months and 9% said it would get worse; the rest said it would stay about the same. In contrast, the latest WSJ/NBC News poll found 33% of the general public expected the economy to improve and 23% think it will get worse.
The difference may depend on the definition of "better." The economy is "doing better, but not yet doing well," said Neal Soss of Credit Suisse. Economists, on average, now see the odds of double-dip recession at 20%. On average they expect the economy to grow at a pace below 3% through the second quarter of 2011, so slow that they anticipate the unemployment rate, now at 9.5%, will drop to just 8.6% by the end of 2011.
Half don't see the jobless rate returning to 5.5%, roughly full employment, before 2015. "We see gradual improvement, with an emphasis on gradual," said Bruce Kasman of J.P. Morgan Chase.
The forecasters see the economic effects of the BP PLC oil spill in the Gulf of Mexico sharply different from the public. While 41% of respondents to the WSJ/NBC poll said the spill would affect the economy "a great deal," not a single economist agreed. Thirty-seven economists, or 70%, said the effect would be "very little," compared to just 6% in the public-opinion poll. "It's an environmental nightmare, but the national economic impact is minimal," said Paul Ballew of Nationwide.
The economists and public were in line on their views of President Barack Obama's handling of the economy. Half the respondents to the WSJ/NBC poll disapprove of it; 46% approve. Among the economists, 29 or 64% of those who answered the question disapprove. And similar majorities of the public (63%) and the economists (70%) agree that Congress should focus on reducing the budget deficit even if it means it will take longer for the economy to recover.
"The administration has created immense uncertainty and arbitrarily attacked various industries," said Stephen Stanley of Pierpont Securities. "Stimulus efforts were a bust. Let's try some fiscal responsibility."
But some economists, while worried about the long-run deficit, think economic growth should take precedence. "Stimulate now but pass credible laws that will reduce deficit several years out," said Nicholas Perna of Perna Associates.
Most—27 or 59% of those who responded to the question—of the economists said if they were in Congress they would vote to renew the extension of unemployment compensation for up to 99 weeks, a proposal that is stalled in the Senate amid partisan maneuvering and worries about the federal deficit.
"An abrupt end to unemployment benefits could do more to damage the deficit than repair it by weakening the recovery and forcing the long-term unemployed to apply for more costly long-term benefits, such as Social Security," said Diane Swonk of Mesirow Financial.
But 19 economists oppose an extension. It "increases incentive to be unemployed," said Ram Bhagavatula of Combinatorics Capital LLC.
For more information contact a
Board Member.
6300 Enterprise Lane • Madison, WI • ©2010 Engineered Wood Products Association. All rights reserved.
