The Wall Street Journal recently reported that The Conference Board has put the chance of a recession at 45% within the next 12 months. This is higher than other polls, which are more in the neighborhood of 1-in-3. TCB Chief Economist Bart van Ark’s projection is up from 1-in-3 in August and 1-in-6 in July. The WSJ noted, “For the last 23 years, a downturn has followed every time The Conference Board’s estimate topped 40 %.”
This news is significant because for the past year The Conference Board has unfortunately has more accurately projected the performance of the U.S. economy than such groups as Kiplinger’s, Moody’s, and the National Association of Business Economists. In some cases, these groups provided projections that pointed to a recovery.
The Conference Board’s outlook for the remainder of 2011 and 2012 is:
Real GDP
2011 1.6%
2012 1.8%
A slight improvement is on tap for the second half of 2012.
Consumer Spending
2011 2.1%
2012 1.9%
The consumer will not jumpstart the economy
Capital Spending
2011 6.9%
2012 5.5%
The private sector will be less than robust over the next 18 months.
Net Exports (billions)
2011 -$398.3
2012 -$370.6
Slight improvement in the trade deficit.
This is not a pretty picture!
©Copyright 2011 by CBER.