AP: Only a Big Rise in the Price of Oil Can Derail the Economic Recovery
I'm not 100% sure who these 42 leading economists were that the AP surveyed but apparently they feel that only oil can stop us now. Well shit, we must be doomed then because the way I see it, as long as oil continues to be denominated in dollars, I'll keep cursing every time I shove the nozzle into my Mazda.
Too bad the Fed can't drill for oil (thanks for that lesson, Bernanke!).
The American economy is now strong enough to withstand Middle East turmoil and the Japanese nuclear crisis. Only a big rise in the price of oil could stop it now.
Those are the findings of an Associated Press survey of leading economists, who are increasingly confident in a recovery that is nearly two years old. They expect the economy to grow faster every quarter this year.
Here are a few of their other predictions. Remember that it was leading economists that felt the housing bubble was not a bubble and that house prices would continue to rise indefinitely.
— The economy will grow at a 3.2 percent annual rate in this quarter, then 3.4 percent from July through September and 3.5 percent from October to December. That would be stronger than the expected 2.2 percent pace for the first quarter.
— Employers will hire more. The unemployment rate, now 8.8 percent, will drop to 8.4 percent by December. That's more optimistic than the economists' view three months ago, when they predicted unemployment would be 8.9 percent by year's end. The economists think employers will create 2.1 million jobs this year, more than double last year's 940,000.
— Average hourly pay, which has not increased fast enough over the past year to keep up with inflation, will rise. A majority of economists think pay will consistently exceed inflation beginning next year at the latest.
— Consumer spending will grow 2.8 percent this year. That's a bit weaker than economists predicted three months ago. But it's more than last year's 1.7 percent increase, when many Americans were still feeling the effects of the recession. The downturn wiped out $7 trillion in wealth and eliminated 7.5 million jobs.
— Inflation will come in at 2.8 percent this year, higher than predicted three months ago, mainly because of costlier energy and food. But 2.8 percent would still be lower than the average 3.2 percent inflation over the past 30 years. Last year, it was 1.5 percent.
It's probably also prudent to point out there that these are likely the same leading economists who expected U.S. GDP to run 3%+ instead of the pretty sad 1.8% we got this morning.
Not to fear, America, the experts are totally on this.