The U.S. economy is going to grow by 4.5 percent during the first half of 2010, with most of the expansion coming in the second quarter, writes economist Brian Wesbury.
Wesbury notes that he believes the consensus among economists for a much lower rate of growth is too pessimistic.
“Late last year, when the consensus expected an anemic recovery of 2.8 percent real GDP growth in the second half of 2009, we laid out a case for a growth rate of 4.7 percent,” Wesbury, along with colleague Robert Stein, recently wrote in their column in Forbes magazine.
“In the end, real GDP grew at a 4.1 percent rate in the second half of 2009 — 5.9 percent in the fourth quarter — vindicating our optimism versus the consensus.”
Now, says Wesbury, the consensus is forecasting a growth rate of 2.7 percent for the first half of 2010.
“We are predicting 4.5 percent, with faster growth in the second quarter than the first. The tilt toward Q2 is due to unusually harsh winter weather across much of the country,” writes the economist, and fellow at the Heartland Institute, a think tank in Chicago.
Other economists are underestimating the resilience and robustness of the U.S. economy and remain fixated on expectations of a "new normal" of lower growth, writes Wesbury. “But productivity is strong, monetary policy is — and will continue to be — easy, inventories are razor-thin and corporate profits are growing rapidly,” writes Wesbury.
As U.S. economic growth once again gains momentum, the economic expansion in China may have peaked, giving the U.S. a competitive edge once again on the global stage, reports Business Week magazine.
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