- US: Productivity & Costs (Q4 + Annual Revisions)
- US: Challenger Employment Report (Feb)
- Italy: GDP *Annual Revisions* (Q4)
- Hungary: External Trade, Export and Import Price Index (Dec); Bosnia: IP (Jan); Estonia: IP (Jan); Serbia: PPI (Feb); Croatia: IP, Monetary Authorities Accounts (Jan); Russia: CPI (Feb)
- Ireland: Industrial Stocks (Q4)
- Greece: Unemployment (Dec); Cyprus: CPI (Feb)
- more updates...
Economy in Brief
U.S. Mortgage Loan Applications and Interest Rates Are Roughly Unchanged
The Mortgage Bankers Association reported that their total Mortgage Market Volume Index ticked 0.1% higher last week (10.3% y/y)...
U.S. ISM Nonmanufacturing Index Improves; Employment Strengthens
The ISM composite index of nonmanufacturing sector activity nudged higher to 56.9 during February from an unrevised 56.7 in January...
EMU Service Sector Leads!
The finalization of the EMU PMI indexes brought slightly weaker values to the report...
U.S. Light Vehicle Sales Fall to Lowest Since April; Trucks Share is Trending Higher
Sales of light vehicles declined 2.6% during February to 16.23 million (AR) from 16.66 million in January...
U.S. Gasoline Prices Reach Another High; Crude Oil Prices Decline
Gasoline prices continued upward by 14 cents last week to $2.47 per gallon (-28.9% y/y) following the prior week's 6 cent increase...
New York State Economic Conditions Recover but Prices Ease
The ISM reported that, for New York State, their February index of business conditions expected in six months increased to 71.7...
by Tom Moeller January 25, 2013
Blue Chip Economic Indicators polls top business economists and collects their forecasts for critical indicators of future business activity. Since 1976, the monthly survey has been derived by averaging panel members' forecasts for each variable. Studies have shown that by averaging the opinions of many experts, the resulting consensus forecasts tend to be more accurate over time than those of any single forecaster. The Blue Chip consensus forecasts are available in Haver's BLUECHIP database.
The latest Blue Chip survey foresees U.S. economic growth of 1.6% this quarter following an anemic 1.4% rise during Q4'12. There is, however, divergence as to the degree of further improvement. By the end of 2013, the consensus foresees GDP growing at 2.7% rate with the top 10 forecasts at 3.6% and the bottom 10 at 1.8%. The same divergence holds true for next year's expected growth. The consensus of a 3.0% advance in real GDP for Q4 2014 is derived from 3.8% at the top end and 2.2% at the bottom.
There's also divergence in the U.S. inflation projections. The CPI is expected, by the consensus, to be growing at a 2.1% rate by the end of 2013. The top ten foresees a 2.7% rise and the bottom 10 expects 1.6%. The forecasts for 2014 are equally wide. The consensus expectation of 2.2% consumer price inflation is bounded by 2.9% amongst the top ten projections and 1.6% at the bottom, or little changed from this year.
As for the U.S. unemployment rate, the forecasts follow directly from the advance in real GDP. Moderate growth in the economy is expected generally to pull the unemployment rate down to 7.5% by yearend 2013 and to 7.0% by the end of next year. The top ten expects little change in the unemployment rate, on average, from where it is now by the end of 2013, but then slipping to 7.5% by the end of next year. Forecasts amongst the bottom ten average 7.2% at the end of this year and 6.5% at the end of next.
What this means for U.S. interest rates for the rest of 2013 and in 2014 also follows consistently from the real growth and inflation projections. The consensus forecast is for no change in Treasury bill rates by the end of this year but then a slim rise to 0.3% by the end of 2014. That's bounded at the high end by 0.3% and 0.7% for this year and next, respectively, and no change from today by the end of 2014 at the low end. For 10-year Treasuries, the consensus forecasts rates of 2.2% at the end of this year and 2.7% at the end of 2014. The top ten average of 2.6% in Q4'13 and 3.4% for next yearend is countered by 1.8% at the bottom, then 2.1% at the top.
The Blue Chip survey also covers annual forecasts for other U.S. economic variables in 2013 and 2014. For example, the U.S. economic recovery should continue to be stronger for real nonresidential fixed investment with a 5.7% advance next year compared to 2.4% growth in real personal consumption expenditures. Housing starts are projected to rise to an average 1.2 mil. from 1.0 mil. this year and light vehicle sales should gain to 15.6 mil. from 15.0 mil. in 2013. In addition, corporate profits are projected to rise 5.7% next year following a 4.7% advance this year.
Finally, annual international consensus forecasts are gathered for several economic variables. For example, the latest Blue Chip survey indicates China's real economic growth of roughly 8.0% this year and next versus no growth in the Eurozone this year and a 0.9% uptick next year. Real growth in Japan is expected to improve to 1.2% next year but that will be outpaced by Taiwan where real GDP should rise 3.1%. Inflation projections vary widely with prices in China up 3.6% next year but Eurozone inflation falling to 1.8%. In Japan, a minimal 0.7% rise in consumer prices also is expected to contrast with a 1.9% rise in prices in Taiwan.
The results of the next survey will be available on February 9.
|Blue Chip Economic Indicators (%, AR)||Q4'12||Q1'13||Q2'13||Q3'13||Q4'13||2014 Avg.|
|U.S. Real GDP (%, AR)||1.4||1.6||2.1||2.5||2.7||2.9|
|GDP Price Index (%, AR)||1.7||1.7||1.7||2.1||1.7||2.0|
|Consumer Price Index (%, AR)||2.1||1.4||1.9||2.2||2.1||2.2|
|Industrial Production (%, AR)||0.4||2.5||2.9||3.3||3.7||3.5|
|Unemployment Rate (%)||7.8||7.8||7.7||7.6||7.5||7.2|
|Treasury Bills (%)||0.1||0.1||0.1||0.1||0.1||0.2|
|Treasury Notes (%)||1.7||1.8||1.9||2.0||2.2||2.5|