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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July 21, 2010 Commentary
A less robust first half of 2010 than anticipated in May

In the May 2010 issue of the LEQ:

Economic Growth: Rotating from Inventory to Sales

Over the last three quarters, which I believe is the early stage of an economic recovery in the U.S., the change in business inventories accounted for the bulk of the nearly 3.8 percent annual rate of growth in real output. That is about to change. Over the next three quarters, the change in business inventories still may contribute to growth but the bulk of the contribution is expected to come from final sales. Moreover, I doubt that the growth rate over the remainder of 2010 will be as anemic as the consensus now seems to suggest, the European debt panic notwithstanding. Pent-up consumer demand, a modest bounce in housing, and ongoing gains in business fixed investment will lead the way. Inflation will remain benign for the remainder of this year and most of next year. This means that any action by the Federal Reserve to make monetary policy less accommodative will be very gradual.

Greece's Debt Crisis: A test of Europe's resolve to remain united

The European Union (EU), with an assist from the International Monetary Fund, has come up with a plan to defend the EU against the threat of one of its members defaulting on its debt. In particular, the plan is aimed at Greece, but it could also help Portugal and Spain survive a similar threat. The plan essentially calls for the European governments with better credit ratings to issue debt to replace Greece’s debt. At the moment, investors seem concerned that the need for a rescue will spread to other European states, testing the resolve of the Europeans to remain united. Indeed, some investors have expressed concern that such a political crisis in Europe would be devastating for the global economy at a time when even the U.S. is perceived to have limited debt capacity to come to the rescue.

Economic Commentary

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.

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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.