Economists hugely overestimated the U.S. economy’s strength in The Wall Street Journal’s survey a year ago.
So they’re being a bit more cautious this year, with the 49 economists on average forecasting an acceleration of growth to only 2.5 percent from 1.6 percent last year.
"You could say that we've learned a lesson from last year, and we're not quite ready yet to buy into this momentum," Aneta Markowska of Société Générale tells The Journal.
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Last year, the average forecast called for growth of 3.4 percent more than twice the actual 1.6 percent figure.
There are plenty of reasons for caution, including the European debt crisis, instability in the Mideast, only mild improvement in the employment picture, and near fiscal paralysis in Washington.
"Because it's still only a modest recovery, we still are vulnerable to unforeseen shocks," Dean Maki, of Barclays Capital, tells The Journal.
Even the modest improvement predicted for the economy this year may prove to be overly optimistic if last year is any guide. "We're seeing a little bit of a repeat of history here," Tim Gill of NEMA, a manufacturing trade group, tells the paper.
The economy expanded 2.8 percent in the fourth quarter, but more than half of that came from inventory buildup, which indicates weak sales.
"The fundamental story is that demand remains sluggish — and everything else follows from it," Cliff Waldman of Manufacturers Alliance/MAPI, a manufacturing research group, tells the Los Angeles Times.
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