This week we look at two new economic forecasts for the US in 2011. The Wall Street Journal recently released its annual survey of more than 50 leading economists and forecasters, and I will summarize the findings for you. Also, we'll look at the latest findings from the Blue Chip Economic Indicators which surveys 50 well-known economists. In both surveys, the majority of analysts believes the US economy will grow by more than 3% this year (3.3% per the WSJ and 3.1% per BCEI).
Surprisingly, to me at least, both surveys suggest that inflation will remain below 2% for all of 2011. Given the explosion in food and energy prices, that sounds low to me. Also, the results of both surveys are based on the assumption that there will be no new negative surprises or "Black Swans" in 2011. I certainly would not make that assumption, especially with home foreclosures hitting new highs and the unemployment rate expected to remain above 9% for most of the year.
While the latest survey averages suggest GDP growth will be over 3% this year, there were plenty of forecasters cited that believe the economy will grow by less than that rate in 2011. I will analyze the reasons why the economy may fall short of 3% growth this year. And finally, we take a look at some possible Black Swan events that could arise this year. It should all make for an interesting E-Letter.