Economic Forecast: 2014

Over the last 16 months we have seen substantial growth in the GDP of the economy with the first quarter of this year expected to be ticking in at 2.6%. This is in line with the 2.6% growth which was seen in the fourth quarter of 2013. The overall GDP growth for this year is expected by most economists to come in at a respectable 2.8%. These numbers however are in sharp contrast to my in house numbers which are far more robust. The main driver of economic success for the American economy will be dependent on the debt, or lowering thereof. By most economists reckoning the consumer price index is expected to rise by 1.7% on average for the year. The March consumer price index rate rose by 1.5%. I expect this trend to continue throughout the year more or less with the ending CPI average for the year coming in at 1.6%. I believe that this will have substantial downward pressure placed upon it throughout the year culminating in the summer, and winter months. The GDP numbers will rise substantially throughout this year with 1st quarter results expected to come in at 2.9%.  These are the most anemic of the GDP forecast as we expect for 2nd quarter, 3rd quarter, and 4th quarter GDP numbers to be substantially higher than most economic forecast.  The 2nd quarter is expected to come in at 3.3% as winter recedes and job growth continues at a healthy pace. Also we expect consumer prices to be lower throughout this period and that fact should boost growth significantly along with government output. In the 3rd quarter as with the 2nd quarter, growth is expected to remain relatively high. Growth is expected to maintain at the 3.3% level so long as intangibles remain in line..For the 4th quarter GDP growth should continue a nice clip of 3.3% as we head into the holiday season. With the republican takeover of the congress this should ease investors fears on such issues as taxes, and the overall health of the economy leading to a healthy bounce near the end of the quarter. This will only be bolstered by news of a successful pull out and victory of NATO forces in Afghanistan giving the euro zone economies a much needed lift that will ameliorate somewhat the jobs crisis in a number of those countries. GDP in the fourth quarter is expected to rise to between 3.2%, and 3.4%.

I expect for the American GDP average for the year to be between 3.187% and 3.2%.

As for the DOW Jones industrial average (DJIA) in terms of growth for the year it is expected to raise by between 464 and 596 points total over the course of the year. This puts the average on Dec ember 31st at between 17,040.128, and 17,172.813 for the year.

It should be noted that manufacturing is expected to pick up considerably as the debt to GDP ratio falls precipitously.

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