Exactly one month ago, the WSJ reported that Economists were optimistic: Economists Expect ‘Solid Expansion’ To Last Into 2006:
The U.S. economy is likely to continue its "solid expansion" into 2006, even as price spikes in oil and natural gas cause ripple effects in coming months, a new National Association of Business Economists survey of 43 forecasters says.
Hurricane Katrina’s "relatively short-lived negative impact on the national economy" won’t be enough to disrupt moderate growth, said the group’s president-elect, Stuart Hoffman, chief economist at PNC Financial Services Group Inc. He announced the results of the survey, which was conducted Aug. 30 to Sept. 12, at NABE’s annual conference here.
In the storm’s aftermath, the forecasters pared their prediction for inflation-adjusted economic growth by 0.4 percentage point for this quarter and by 0.2 percentage point for the next one. Overall, they expect gross domestic product to rise 3.5% this year and 3.4% next year.
The forecasters expect strong employment growth next year, fueled partly by increased spending by federal, state and local governments, Mr. Hoffman said.
Energy prices continue to be a wild card. NABE forecasters predict that crude oil will cost $63 a barrel by year end, dropping to about $55 by the end of 2006. The survey didn’t address the volatility of natural-gas prices.
How are they doin’ so far?
Economists Expect ‘Solid Expansion’ To Last Into 2006
THE WALL STREET JOURNAL, September 27, 2005; Page A2