February 14, 2012
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By this stage in the recession, you are no doubt weary of reports on the tentative starts and stops of the U.S. economic recovery. The Kauffman Economic Outlook: A Quarterly Survey of Leading Economic Bloggers offers some hope. In the first quarter of 2012, the economic clouds appear to be lifting—for good.
The quarterly survey of the top economics bloggers in the U.S. has been gloomy for some time. This quarter’s survey is far from clear skies, but its findings are substantially more optimistic than the survey from last quarter—or from the last three quarters of 2011, for that matter.
Economic conditions: stronger
When respondents described the condition of the U.S. economy, 14 percent said that it is strong and growing or strong with uncertain growth. Compare that to 4 percent who said so last quarter. This quarter, 76 percent said the economy was mixed, compared to just 55 percent last quarter.
Last quarter, 25 percent of financial bloggers said the economy was facing recession. This quarter only 10 percent said so. And last quarter, 16 percent believed the economy was weak and recessing. This quarter, nobody thought that. It's a huge improvement over all the surveys Kauffman has conducted, including those in 2010 when the surveys started.
Economic descriptors: recovering
Bloggers were allowed to choose their own descriptors for the economy. Last quarter, uncertain, weak and fragile were the dominant terms. This quarter, recovering, improving, hopeful and growing were popular choices. However, uncertain and fragile were still common.
What's next?
What do economic bloggers believe will happen to the U.S. economy in the next three years? They project that employment, global output and GDP will increase, as will top marginal tax rates, inflation and interest rates. However, they project that corporate tax rates and the U.S. deficit will decrease.
Politics and the economy
How does politics figure in to the state of the economy today? The bloggers are nonpartisan, but roughly 63 percent of respondents contend that the federal government is too involved in the economy.
Many mistrust government data. More than 30 percent of respondents both this quarter and last said they believe the economy is doing worse than official government statistics indicate.
Political gridlock is a major problem said all but 16 percent of the respondents. They blame both parties equally for Congress’s lack of action.
Raising the top marginal income tax rate on top earners is a hot-button issue for this election season. Bloggers were almost as gridlocked as Congress on the issue. They were equally divided between these responses: strongly opposed, opposed, supported and strongly supported this idea.
The 2011 first-quarter Kauffman Economic Outlook Survey started off optimistically, too, although not as positive as this quarter. But for the remainder of 2011, the outlooks in the quarterly reports took a nosedive. (You can find previous Kauffman Economic Outlook: Quarterly Surveys going back to 2010, when the surveys started.)
Do you think this year will follow suit? How do you see the U.S. economic outlook—and your small business’s economic outlook—for 2012?
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