The U.S. Economy. . . Stuck in Low Gear

The information in this forecast is gathered by the Journal from sources it considers reliable. Neither the Journal nor the individual institutions providing the data guarantee accuracy; nor do any of them warrant in any way that use of the data appearing herein will enhance the business or investment performance of companies or individuals who use them.PARTICIPANTS I Beacon Economics = LA, California; Conf Board = Conference Board, New York, New York; Global Insight = Global Insight, Eddystone, Pennsylvania; GSU - EFC = Georgia State University, Economic Forecasting Center, Atlanta, Georgia; Moody's Economy = Moody's Economy, com, Westchester, Pennsylvania; Mortgage = Mortgage Bankers Association, Washington, D.C.; NAM = National Association of Manufacturers, Washington, D.C.; Northern Tr = Northern Trust Company, Chicago, Illinois; Perryman Gp = The Perryman Group, Waco, Texas; Royal Bank of Canada, Toronto, Ontario, Canada; SP U.S. Bank = U.S. Bank & Nuveen Capital Asset Management, Minneapolis, Minnesota; US Chamber = U.S. Chamber of Commerce, Washington, D.C.; Wells Fargo = Wells Fargo Bank, San Francisco, California.The U.S. Economy might best be described as being stuck in low gear. Despite positive progress, the U.S. economy appears to be moving at a snail's pace, and the Consensus Outlook is calling for pretty much the same throughout the entire year. In concert with this assessment, John Silvia, Chief Economist for Wells Fargo, poses an inevitable question: Is this the new norm? His review of the economy includes below-trend economic growth, little threat of inflation, seemingly mild interest by consumers, unprecedented low interest rates, and a federal government in full retreat. In his latest release, Rajeev Dhawan, Director of the Georgia State University's Economic Forecasting Center, highlights political rancor, corporate uncertainty, and global malaise. No matter what the perspective is, a pervasive threat of gloom hovers over the economy.The Consensus calls for anemic growth in real GDP at around 2.0%. The two closely watched barometers - personal disposable income and personal consumption expenditures - are projected to increase just over 3.0% (although both of these measures are not adjusted for inflation and therefore can be viewed as lackluster at best). While some good news is reflected in the Outlook surrounding inflation - the chained price index and real CPI are forecasted to increase on average by 1. …