Tuesday, June 28, 2011

Back and Forth on the Economy

There was an interesting article on Bloomberg News yesterday contrasting the forecasts given by two well-respected economists, Mark Zandi of Moody's Analytics and David Rosenberg of Gluskin Sheff and Associates. They take very different views on the direction this economy is headed: Zandi is bullish and Rosenberg is bearish.

Zandi points out that 2 million private-sector jobs have been created in the past year. He thinks that the two years of GDP growth we've had and the continued rise in corporate profits mean the economy is poised for even more growth.

Rosenberg points to the end of the stimulus program, which will force state and local governments to slash their budgets and exacerbate unemployment. Problems in Europe and Japan will continue to be a drain on our economy, and Rosenberg doesn't expect corporation to use those soaring profits to hire more workers.

Who's right? There's probably a fair amount of sense in the opinions of both men. It remains to be seen which trends will take precedence in the future.

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