2013-01-01 14:27:53 - United States Business Forecast Report Q1 2013 - a new country guide report on companiesandmarkets.com
We maintain our 2.0% real GDP growth forecast for 2012 and our 2.1% projection for 2013. The economy is running dangerously close to ´stall speed´, by which we mean that any major unanticipated headwind would be enough to push the economy into recession.
Our core view remains that President Barack Obama is likely to win re-election in the November 6 elections. We also maintain our view that in the US Congress, the Democratic Party will retain the Senate despite the loss of some seats, and the Republican Party will keep control of the House of Representatives. Further political gridlock is the most likely outcome.
On the monetary front, the Federal Reserve launched another round of long-term asset purchases (´QE3´) in September 2012
and will keep benchmark interest rates at around zero until 2016. This will be supportive of growth, but not a panacea in the face of ongoing private sector deleveraging.
On the fiscal front, we are cautiously optimistic that the ´fiscal cliff´ of tax increases and expenditure cuts set to be implemented at the beginning of 2013 will be avoided at least temporarily. However, the long-term fiscal outlook remains worrying.
Major Forecast Changes
We have pushed back our expectations for Fed rate tightening, with the first Fed funds hikes only in 2016, as opposed to 2015 in our previous set of forecasts.
Key Risks To Outlook
Downside Risks To Growth Forecast: The biggest external risk is a collapse of the eurozone, which would hit the US via a financial sector shock and trade channels. A major domestic policy error, especially with regards to the 2013 ´fiscal cliff´, could push the US into recession.
Downside Risks To Long-Term Outlook: The gaping fiscal deficit and rising government debt burden are not an immediate concern, but do pose a risk to macroeconomic stability over a longer horizon.
Click for report details: www.companiesandmarkets.com/Market/All-Sectors/Country-Guide/Uni ..
Browse all All Sectors Country Guide Reports www.companiesandmarkets.com/Market/All-Sectors/Country-Guide?aCo ..
Browse all All Sectors Company Profile Reports www.companiesandmarkets.com/Market/All-Sectors/Company-Profile?a ..
Browse all Latest Country Guide Reports www.companiesandmarkets.com/Market/All/Country-Guide?aCode=f3fb3 ..
Companiesandmarkets.com is a leading online business information aggregator with over 300,000 market reports and company profiles available to our clients. Our extensive range of reports are sourced from the leading publishers of business information and provide clients with the widest range of information available. In terms of company profiles, Companiesandmarkets.comâs online database allows clients access to market and corporate information to over 100,000 different companies. We provide clients with a fully indexed database of information where clients can find specific market reports on their niche industry sectors of interest.