News Column

Handicapping the 2003 Economy

June 2003, HISPANIC BUSINESS Magazine

For the last three years, economic forecasters have predicted a quick turnaround. Politicians, Wall Street pundits, and researchers keep pointing forward to a time when things will get better. So far, they haven't. According to CNN, former Federal Reserve economist Lacy Hunt calls this the "mañana forecast" - an economy that always will get better tomorrow.

In his most recent congressional testimony, Federal Reserve Chairman Alan Greenspan declared: "Looking ahead, the consensus expectation for a pickup in economic activity is not unreasonable, though the timing and extent of that improvement continue to be uncertain." Even for the understated Mr. Greenspan, a "not unreasonable" chance for a recovery sounds like not much chance at all.

To clarify the outlook, Hispanic Business has collected forecasts from four respected sources: The Conference Board, a New York-based research organization; the Paris-based Organization for Economic Cooperation and Development (OECD); the Philadelphia Federal Reserve Bank's Survey of Professional Forecasters (SPF); and the Congressional Budget Office (CBO). By scanning the forecasts (see table below) and understanding the real-world impact of the scenarios they imply, CEOs and professionals can gain a handle on strategic decision-making for the rest of 2003.

Summary of Economic Forecasts
  Conference Board OECD SPF CBO

HispanTelligence
Summary

  2003 2004 2003 2004 2003 2004 2003 2004 2003 2004
Real GDP 2.9 4.0 2.5 4.0 2.2 3.6 2.5 3.6 2.2-2.9 3.6-4.0
CPI inflation 2.6 2.8 1.6a 1.3a 2.4 2.3 2.3 2.2 2.3-2.6 2.2-2.8
Real consumer spending 2.9 3.7 NA NA NA NA NA NA 2.9 3.7
Unemployment rate (%) 5.9 5.5 6.0 5.8 5.9 5.7 5.9 5.7 5.9-6.0 5.5-5.8
90-day T-bills (%) 1.3 2.1 1.4 3.0 1.2 2.1 1.4 3.5 1.2-1.4 2.1-3.5
10-yr. Treas. bonds (%) 4.6 5.0 NA NA 4.1 4.7 4.4 5.2 4.1-4.6 4.7-5.2

Continued | 1 | 2 | Next >>

Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters