Business Sets Economy's Pace
Economic growth is picking up in both developed and emerging markets.
U.S. gross domestic product (GDP) rose at an annualized rate of 5.9% in the December quarter, and the consensus among economists polled by Blue Chip Economic Indicators projects roughly 3% growth this year and next year. While the projected growth is low for an economy pulling out of a recession, the U.S. looks pretty good relative to most developed economies. For 2010 and 2011, Japan and Western Europe are expected to grow less than 2%.
Prognosticators expect businesses to lead the U.S. out of recession, with the consensus now projecting 16.3% growth in corporate profits in 2010. However, personal consumption spending is expected to rise 2.1%, reflecting a weak labor market and sluggish wage growth. While a double-dip recession seems unlikely, the recovery could remain fragile until consumers get on board.