President Obama is many things to many people but one thing he is not, nor is his administration is Barbara Eden as “Jeanie.” Despite media cries and opponent calls for immediacy, he simply cannot cross his arms and blink and have the economic malaise he inherited simply disappear overnight – or within his first six months in office. Sorry America, but it just cannot happen.
What this brilliant man did ask for, from day one after winning in November, is patience. He told us that the stimulus was not a “quick fix” but would ultimately help us recover and move the economy forward. And, it appears he might just be right, yet again.
According to 23 well-known economists and top forecasters surveyed by BNA (Bureau of National Affairs), the consensus predicts:
• The recession will end this summer, but most consumers won’t recognize it as a recovery until the middle or latter part of 2010.
• The glut of housing inventory weighing on the economy is beginning to correct as businesses which did not anticipate the absolute collapse of sales activity late last year realign inventories appropriately.
• The Obama administration’s stimulus package will help support the recovery, though economists vary on how much weight to give it, particularly in the first year. Consensus is that, mostly by increasing business confidence, it will return the economy to full employment faster than would have been the case without it.
• A total of about 6 million payroll jobs have been lost, or 4.3 percent of employment since the recession began in December 2007. Panelists expect total losses to reach 7.6 million jobs by the time employment hits bottom in the first half of 2010, although the pace of the decline will decelerate steadily.
• In the first half of 2010, payrolls will grow on average 51,000 a month.
• Federal Reserve policymakers will keep monetary policy on hold this year. That will change in 2010 as the central bank acts to remove some easing, though not very aggressively, since inflation is expected to remain low. The consensus predicts the federal funds rate will reach 1 percent by the end of next year.
• Long-term interest rates as measured by the yield of the 10-year Treasury bond will rise to 4.33 percent by the end of 2010 from an average 3.82 percent at the end of this year. It is around 3.5 percent now.
• Credit conditions improve and the $787 billion fiscal stimulus package bolsters spending and mitigates state and local government cutbacks.
Patience is a virtue. Remember, it took skilled pols, businesses, economists, etc., seven years to get us here. Let’s at least give our new leader, our new commander in chief, our president, a full year before we throw in the towel.