Foodservice Equipment Reports

Things Will Get Better, Blue Chip Forecasts. Just Not Yet

It being a new year, we thought we’d share the current macroeconomic forecasts from Blue Chip Economic Indicators. The 50 major economic forecasting groups polled monthly by Blue Chip raised their consensus forecast for real growth of gross domestic product in the U.S. this year by a tick to 2% in the early January survey. This will be down slightly from an estimated 2.2% annual growth in 2012. The initial real GDP forecast for ’14 came in at 2.6%.

Growth in the first half of ’13 will be constrained as consumers react to the return of payroll taxes to 6.2%—a 2 point boost—and the increase in income taxes on high-income households. The group predicts real disposable income will fall 1.8% on an annualized basis in the first quarter before rebounding to 2% in the second quarter. Still, the DPI forecast for the year as a whole is only 1.1%, below even last year’s sluggish 1.3% growth.  Real DPI growth is expected to increases to 2.2% next year. Real personal consumption expenditures will also be restrained. The consensus forecasts real PCE will grow only 1.9% this year and 2.4% next.

The Blue Chip economists continue to emphasize the many uncertainties around federal fiscal and budget policies and the slow comeback from the worst recession since the Great Depression. While there are more positive signs, such as the strong market for automobiles and the gathering rebound of the housing market, it will take several more years and some resolution to government’s fiscal problems before the economy in the U.S. returns to “normal.”