The Wall Street Journal published the results of its monthly survey of economists. The consensus forecast is for modest growth in GDP, 2.3%, and employment, 2.2 million jobs to lower the unemployment rate to 8.2% by this time next year. A number of potential risks are mentioned (spiking oil prices, increase in unemployment), but three potential tornadoes are ignored. Greece is holding a yard sale to try to hold off foreclosure. The U.S is reworking its budget (flying coach instead of business, cutting back to basic cable) in hopes increasing the line of credit. And the Fed has been very clear that there is no plan for QE3. (The economists were decidedly unimpressed with the results of QE2!)
So this is where we stand: sluggish growth and stubborn unemployment for the next 18 months with no expectation of any policy changes.
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