Business economists see the US economy gathering momentum through this year as job growth accelerates, with inflation edging modestly higher, a survey showed yesterday.
The National Association of Business Economists (NABE) boosted its forecast for this year for US GDP growth to 4.7 percent, up from 4.6 percent in February. The economists maintained their outlook for 3.8 percent growth next year.
The biggest risk to the outlook, according to the economists, was a possible terrorist attack on the US, with high energy prices and rising interest rates also seen as potential threats.
"One should conclude from the latest survey that the expansion is now on a solid and sustainable path," said Duncan Meldrum, the association's president and chief economist.
"If there is a dark lining in this silver cloud, however, it is the upward revision to the panels forecast of inflation for 2004 and 2005. Rising prices of energy and other industrial commodities are contributing to the higher inflation, but so too is robust growth of overall demand, a typical source of cyclically rising inflation," Meldrum said.
Still, the NABE economists said they expected only modest increases in interest rates by the Federal Reserve, and said these were unlikely to derail the world's largest economy.
The NABE forecast suggested consumer prices should increase 2.3 percent for both this year and next, up from previously projected increases of only 1.6 percent this year and 1.9 percent next year.
"Inflationary pressures are clearly starting to mount," the NABE report said. "Nevertheless, the panel does not expect the Fed to sharply raise interest rates; and therefore, rising rates do not pose a major challenge to continued strong economic growth through 2005."
An upward revision came from employment growth, now expected to rise somewhat faster than previously forecast.
This is expected to drive the unemployment rate down to 5.5 percent this year on average and to 5.3 percent next year.
The economists said they do not believe the occupant of the White House will make much difference to the level of employment in December 2008, at the end of the next presidential term.
The panel projected non-farm establishment employment under President George W. Bush at US$139.8 million and at US$39.9 million under Senator John Kerry.
The fastest growing components of GDP in this year's forecast are business fixed investment (projected to grow 9.8 percent) and exports (9.4 percent).
The US merchandise trade deficit, however, is now forecast to come in at about US$550 billion for this year, up from the prior forecast of US$542.6 billion.
The economists pointed to slow growth of the euro area trading partners as the primary culprit.
The panel also said the next president will make relatively little difference in the level of the stock market in December 2008.
The panel projected the level of the S and P 500 under Bush at 1,514 and at 1,446 under Kerry, a difference of 4.7 percent.
The report was based on a survey of 31 economists from May 1 to 14.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft