Here's a green shoot for the first day of May. After months of growing gloom, a Wall Street economist actually changed his GDP outlook for the better.
Today, J.P. Morgan chief U.S. economist Bruce Kasman upped his GDP forecast for the second quarter from -2 to nearly flat, or -0.5 percent, and said he expects the recession to end at mid year.
He also raised his growth forecasts for the fourth quarter of 2009 and first and second quarters of next year by a full percent each.. He maintained the third quarter, 2009 GDP at 1 percent growth.
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He now expects growth to start in the third quarter, then move to 2 percent in the fourth quarter, 3 percent in the first quarter, and 4 percent in each of the second and third quarters of 2010.
His reasons are as follows:
"In making these changes we recognize that activity data has not significantly surprised to the upside of our existing forecast. Instead, we are making changes based on three other considerations.
—The quick improvement taking place in Asia and in Emerging Market economies, which increases the likelihood that a synchronized turn in global growth will take hold in 2H09.
—The positive feedback loop emerging between better economic news, improving financial market conditions, and rising consumer confidence.
—Better than expected news from high-frequency readings that are key to watch at turning points (ISM, jobless claims, auto and home sales). These series have not moved decisively from depressed levels. But when they turn in a synchronized fashion they are usually signal that a more fundamental change in the business cycle is afoot.
At this stage we are not changing our unemployment rate or inflation forecast. As such, our Fed policy call is also unchanged."
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