The economists who participate in the long-running Livingston Survey expect higher growth and lower unemployment this year than they did in the prior survey six months ago.
They now expect U.S. growth in the second half of 2012, as measured by gross domestic product, to be 2.6 percent, up from the 2.5 percent they forecast in December.
The 32 participants — from the corporate, financial and business organization worlds — now expect a U.S. employment rate of 8 percent in the second half of this year, substantially lower than their previous estimate of 8.7 percent.
The Federal Reserve Bank of Philadelphia, which covers all of South Jersey in its Third District, conducts the Livingston Survey twice a year. Started in 1946, it is the nation’s oldest continuous sampling of economists’ forecasts.
The good news in the June survey continues on the inflation front.
Economists now think the Consumer Price Index will increase from this year to next by 2 percent, down from their already low forecast of a 2.2 percent inflation rate six months ago.
U.S. borrowing costs are expected to drop even further from their record lows.
The interest rate on the benchmark 10-year Treasury Note is now expected to end the year at 2.2 percent. Previously, the participants had expected a 2.75 percent yield.
The Philadelphia Fed sent the surveys on May 17, and all were returned by June 1.
Not since 501 citizens of ancient Athens voted to condemn Socrates to death for impiety and corrupting the city-state’s youth has a Greek ballot been the subject of such global attention.
Today’s second attempt this spring by Greece to elect a government might determine whether the country stays in the eurozone, destabilizes Europe or sets back the U.S. economy.
I think it will also tell us how much progress the citizens of Greece have made in coming to terms with reality.
We react to a debt crisis — personally or as a nation — much the same way we respond to any large loss. We go through familiar stages of grief.
Greece is well down the list, past shock and denial, pain and guilt, and well into anger and bargaining.
The Greeks might elect someone who feels their anger and resentment at the rest of Europe (particularly the Germans) for forcing enough austerity on them to live closer to (but still not within) their means. A leading candidate has pledged to reject the existing agreements for aid in return for spending cuts.
If anger and bargaining result in Greece exiting or being pushed out of the common currency, the country will surely enter the next stage of grief: depression, reflection and loneliness.
Returning to the drachma as its currency would send the Greek economy into a tailspin, perhaps for years.
Or perhaps the Greeks have thought this through enough and are ready for the start of the turnaround stage, in which they understand and accept their responsibility for their economic condition.
Then they can begin working through their problems, such as tax cheating, wildly unsustainable public pensions and uncompetitively low productivity.
Only then could they have a reasonable hope for a satisfactory economic future.
Whichever path today’s Greek election seems to take, we shouldn’t be too smug about it here in America.
We have our own massive debt problem, and we’re still in the pain and guilt phase, with the anger and bargaining just beginning.
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