Tags: GDP | growth | Kellner | economy

Economist Kellner: GDP Growth May Reach 3 Percent or More This Quarter

By    |   Thursday, 23 Jul 2015 07:03 AM

The economy hasn't exactly blown anyone's socks off in the first half of the year, with GDP shrinking 0.2 percent in the first quarter and the Atlanta Fed's forecasting model indicating growth of 2.4 percent for the second quarter.

But better times are ahead, says MarketWatch chief economist Irwin Kellner. "If the MarketWatch consensus is correct, third-quarter growth could hit the tape at 3 percent or better," he writes.

And what is fueling the strength? Of course, there's the Federal Reserve's low interest-rate policy, Kellner writes. While the Fed is likely to begin raising rates this year, it's highly unlikely to push the federal funds target rate much above its current record low of zero to 0.25 percent.

Lower gasoline prices also are playing a role, he says. The national price average now totals $2.75 a gallon, down 23 percent percent from $3.57 a year ago, according to AAA.

In addition, "the apparent resolution of the Greek crisis removes a major uncertainty hanging over many banks and hedge funds," Kellner says.

Meanwhile, Americans' sentiment toward the economy soured overall in the second quarter, though the wealthy were much more optimistic, according to the CNBC All-America Economic Survey.

Only 24 percent of respondents view the economy as excellent or good, down from 27 percent in the first quarter. In terms of their outlook on the economy for the next year, again just 24 percent of respondents think the economy will get better, compared to 28 percent in the first quarter.

But among those with annual income of at least $100,000 or with at least $50,000 in the stock market, 45 percent see the economy as excellent or good, up from 33 percent in the first quarter. The S&P 500 has returned 7.4 percent over the past year.

The poll also showed concern about income inequality, according to CNBC, although it didn't cite specific numbers.

The survey "demonstrates that those at the top are doing great — everyone else is stagnating or faltering," Jay Campbell, who worked on the bipartisan poll with Democratic-leaning Hart Research Associates, told CNBC. "Whichever party shows it can remedy this situation is the party that will "win the economy."

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The economy hasn't exactly blown anyone's socks off in the first half of the year, with GDP shrinking 0.2 percent in the first quarter and the Atlanta Fed's forecasting model indicating growth of 2.4 percent for the second quarter.
GDP, growth, Kellner, economy
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2015-03-23
Thursday, 23 Jul 2015 07:03 AM
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