Economic Forecasting & Consulting

The Laufenberg Quarterly website provides analysis of economic conditions by Consulting Economist Daniel E. Laufenberg, Ph.D., for professionals in the financial industry. At the core of this analysis is the Laufenberg Economic Quarterly (LEQ), which offers a detailed discussion of the outlook for the U.S. economy that is updated four times a year.

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Economic Quarterly
"Feeling better but still worried" (February 2012)

Economic Commentary
"Consensus too pessimistic about everything" (April 16, 2012)

Economic Perspectives
"House prices: the bottoming process continues" (March 8 , 2012)

LQ Stock Allocation Indicator
(April 16, 2012)

In the February 2012 issue of the LEQ:

Feeling better, but still worried

• In November 2011, the concern of the consensus was that the U.S. economy was gathering gloom, led by a contagious debt debacle in Europe. Given the more favorable U.S. economic releases the last few months, the consensus now has substantially reduced the recession risk for U.S. economy. In other words, the question now is not whether the expansion continues, but at what pace.

• Admittedly, I was too optimistic a year ago about real gross domestic product (GDP) growth in 2011, in large part because of unexpected natural and government budget disasters. Now, some are concerned that I may be too optimistic again in 2012.

• On balance, the U.S. economy finished 2011 stronger than it started. Real GDP grew at an annual rate of 2.3 percent in the second half of the year, compared with an annualized gain of only 0.8 percent in the first half. It may not be stellar but it was an improvement.
  The outlook for 2012 is for solid real growth, still relatively mild inflation, a declining unemployment rate, unusually low interest rates, and good earnings growth. This has not changed from my November report. The keys to the outlook are consumer spending, business fixed investment and housing, all of which are expected to improve this year versus last year.

• Consumer spending, especially spending on services, should accelerate some over the four quarters of 2012 compared with the growth rate over the four quarters of 2011, reflecting solid income growth and the end to deleveraging by households.

• Business fixed investment is expected to accelerate slightly over the four quarters of 2012, as spending on both equipment and structures turn up. Record corporate profits and solid aggregate demand will drive businesses to add capacity in the months ahead. Finally, residential investment starts to improve in a more meaningful way in 2012, as pent up demand for housing finally spills over into new construction.

• I continue to expect the Fed to raise short-term rates earlier than its recent commitment of 2014. At the moment, my best guess is early next year. Under this scenario, equities and high-yield bonds are still preferred over high-grade bonds.

Go Here for the full economic report

Economic Commentary & Perspectives

The website also provides regular commentary on various economic data releases, as well as an occasional comment on markets. This is most often updated during the months between the quarterly.

Special Reports:

Occasionally, I will post to the website more detailed reports on various changes in policy, structure, or regulation, focusing on their impact on the economic outlook. The latest special report is a series of four reports on the health care legislation enacted recently.

Persons and firms interested in receiving the Laufenberg Economic Quarterly and other services of Laufenberg Economic Reports should email us at:

Reports@LaufenbergQuarterly.com

Go Here for more information about Daniel Laufenberg

 

 

 

 

 

 

 

 

 

The views expressed here reflect the views of Daniel Laufenberg as of the date referenced. These views may change as economic fundamentals and market conditions change. This commentary is provided as a general source of information only and is not intended to provide investment advice for individual investor circumstances. Past performance does not guarantee future results.