2007 Forecast for the U.S. Economy

Instead of making a forecast myself, I am providing you a summary of what the top forecasters have said.

All forecasts are variations of a “soft landing”, meaning that the U.S. economy in 2007 will be slower than in 2006, without falling into recession. Most see a temporarly downturn in the first half of 2007, a result of the slowdown in housing as well as a dip in manufacturing due to the auto industry problems. Some then see a pick-up in the second half of 2007, due to a cut in the Fed Funds Rate. None see an increase in inflation, which is currently at 3.3%. Most see job creation remaining stable, with unemployment remaining at current levels, about 4.5%.

Forecasts for 2007 GDP growth varies between 2.2%, from Global Insight, to 3.3% from the President’s Office of Management and Budget. Current annualized GDP growth is 3.4%, per the Department of the Treasury.

Who the Forecasters Are:

• San Francisco Federal Reserve
• The Livingston Group, survey by the Philadelphia Federal Reserve
• President's Office of Economic Advisors
• President’s Office of Management and Budget
• The Conference Board
• Global Insight