Report Forecasts 2007 U.S. Economy
A recent financial report forecasts the continuation of the bull market in equities in 2007, with the economy accelerating mid year.
A recent financial report forecasts the continuation of the bull market in equities in 2007, with the economy accelerating mid year.
The report, released by
Mesirow Financial, is a monthly economic newsletter which focuses on the latest trends and data exhibited in the U.S. economy.
Forecasts for 2007 in the most recent report include:
- Consumer spending is expected to hold in the 3 percent range, about the same as 2006, but a sharp slowdown from its pace earlier in the expansion.
- Declines in residential investment are expected to dissipate as builders work hard to clear unwanted inventories with sweetened financing deals and free upgrades.
- Inventories are expected to stabilize once the auto industry gets its inventories more in line with reduced sales expectations at the start of 2007.
- Government spending is forecast to rise at roughly the same pace as in 2006.
- The trade deficit is expected to improve.
- The Fed is expected to remain on hold as it waits for inflation to abate in the face of an extended slowdown.
- Long-term bond yields are expected to rise slightly, as demand from abroad wanes slightly, but not enough to exceed short-term yields.
- Profit growth is forecast to drop back into the single-digit range.
- The dollar is expected to stabilize after depreciating sharply at the end of 2006.
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