Uncertainty “buts” in economic projections
Economists have a pesky way of “buting” into what are otherwise encouraging forecasts. This trend or that statistic signals growth … BUT yet another trend or a different statistic could lead to slowing. Economists have no difficulty whatsoever in viewing the glass as both half full and half empty.
Perhaps it’s a sign of these uncertain times that even a top forecasting economist like Scott Anderson faces difficulty in discerning the future. And he’s honest in acknowledging the fact: “I don’t know what’s going to happen in 2013.”
Anderson, a senior economist with Wells Fargo, offered both good news and bad in his presentation at Colorado Mesa University in Grand Junction.
The good news? There’s been a broad-based expansion in the labor market as well as increases in consumer spending and confidence among small business owners. Corporate profits also have increased.
BUT, Anderson said, there’s bad news in the fact what economic growth the U.S. has experienced has been anything approaching robust. As he put it: “We’re not exactly going gangbusters.”
Perhaps the most troubling prospect of all is this: The current economic recovery is already about half way through what’s been an average duration for economic expansions following World War II of 7.5 years.
Meanwhile, there’s the ramifications of a possible global recession. That’s not necessarily news from a troubled Europe. BUT growth also has slowed in such developing countries as Brazil, India and even China.
That’s not to mention a number of other factors that cloud the economic outlook, chief among them the upcoming presidential election and a Supreme Court ruling on the constitutionality of health care reforms.
While it’s frustrating, it’s also understandable why economists like Anderson interject their buts so often.
Consider some of the other economic indicators reported in this very issue:
The number and dollar volume of real estate sales in Mesa County continue to outpace last year, BUT worries persist about property foreclosures holding down prices.
U.S. payrolls continue to increase, BUT at a slowing pace that brings into question a more robust labor market.
A monthly measure of optimism among small business owners has increased, BUT still only matches a level posted more than a year ago.
At least the situation also can apply in the reverse: A monthly index tracking business conditions in Colorado has lost ground, BUT continues to forecast growth in coming months.
All this economic news can be unsettling. Nonetheless, there’s a measure of hope from other stories in the paper. Read, for example, the tale of two mountain biking enthusiasts who’ve enjoyed success in operating a popular pizzeria in Fruita. Read what two experts had to say about the game-changing power of innovation or taking the right steps to empower women entrepreneurs. There’s also promise for the future in the abilities of Colorado Mesa University students, whether they’re competing in a national marketing competition or earning degrees in a joint engineering program offered with the University of Colorado.
Thankfully, not all buts are bad.