United States 2011 Quarter 1 GDP

A remarkable thing happened today. For the first time in two years the estimate of United States economic growth was lower than our forecast. Despite weak fundamentals, U.S. GDP growth had been more rapid than our forecast due in part to temporary Government stimulus programs.

The preliminary estimate of U.S. real GDP growth during . . . → Read More: United States 2011 Quarter 1 GDP

United States Economic Forecast

Previously Published March 22, 2011

Forecasting is a challenge in rapidly changing times, and these are very rapidly changing times. At the beginning of the year, it would have been unbelievable if someone had said that Mubarak would be deposed, we would be in a war in Libya, and there would be general uprisings . . . → Read More: United States Economic Forecast

China Has a Problem

Here are two facts about China:

Real estate values declined 27 Percent last month. Inflation is increasing.

Their economic growth has slowed a bit, but it is still really high at 9.7, at least by the official numbers.  Still, China’s leaders have a problem.  Inflation can eventually create disastrous problems, but eliminating it would . . . → Read More: China Has a Problem

The Inflation Environment Is Changing

It is time to write about inflation.  From fall of 2008 until about a month ago I was more concerned about deflation than inflation.  In my post last fall, I characterized the United States economy as being in a “Good-delation Equilibrium”, one that eased pressure on households and the Fed in a weak-demand economic . . . → Read More: The Inflation Environment Is Changing

California Forecast Highlights

Previously published March 22, 2011 in the California Economic Forecast

I mentioned in the United States Highlights essay that the fourth quarter consumption growth rate of 4.1 percent, the strongest in five years, was a surprise given weak economic fundamentals. I also discussed the evidence of significant heterogeneity across U.S. regions. I would argue . . . → Read More: California Forecast Highlights