GDP probably grew 2.2% in Q1

To be honest, I am really struggling to figure out both where the economy is right now and where it is going next. Q4 GDP clocked in at 3.0% growth, while Macroeconomic Advisers (MA) is still forecasting that annualized real GDP growth for Q1 will be about 2.2%. I mean, unemployment claims are down  for Q1 and the ISM Manufacturing report is up, but we still supposedly had a slowing of GDP growth in Q1. I don't doubt it, given the complexity of GDP and its calculation and estimation, but it is still a little much for anyone to get their mind around.

 

Meanwhile the Economic Cycle Research Institute (ECRI) is still forecasting a new recession starting before the middle of 2012, which means sometimes in the next 90 days. I don't doubt that a recession could pop up out of all the uncertainty ahead of us, but I can't say that I can offer any convincing argument that one will occur.

-- Jack Krupansky