2003 GDP Estimates Start Heading Downward
According to the Philadelphia Federal Reserve, a survey of business economists have reduced their estimates of 2003 GDP growth, and are now predicting an annualized rate of growth of 2.5% in 2003. With gas prices nearing all-time highs, record deficits on the horizon, and a war about to break out, it is no surprise that business economists revised downward their forecasts for 2003 growth today. A growth rate of 2.5% and an unemployment rate of 5.7% in the fourth quarter would be welcome, but it should be noted that even these revised forecasts are based on an estimated fourth quarter 2003 growth rate of 3.6%, which itself was revised downward from an earlier estimate of 4.2%. How plausible is fourth quarter growth at that level?
Moreover, is Bush electable with an unemployment rate over 5.5%, a 2003 GDP average of only 2.2-2.5% and exploding deficits heading into campaign season?