The CBO has chimed in with its growth revision for 2011 (and 2012 and 2013):
CBO expects that the recovery will continue but that real (inflation-adjusted) GDP will stay well below the economy’s potential—a level that corresponds to a high rate of use of labor and capital—for several years. On the basis of economic data available through early July, when the agency initially completed its economic forecast, CBO projects that real GDP will increase by 2.3 percent this year and by 2.7 percent next year. Under current law, federal tax and spending policies will impose substantial restraint on the economy in 2013, so CBO projects that economic growth will slow that year before picking up again, averaging 3.6 percent per year from 2013 through 2016.
With modest economic growth anticipated for the next few years, CBO expects employment to expand slowly. The unemployment rate is projected to fall from 9.1 percent in the second quarter of 2011 to 8.9 percent in the fourth quarter of the year and to 8.5 percent in the fourth quarter of 2012—and then to remain above 8 percent until 2014. Although inflation increased in the first half of 2011, spurred largely by a sharp rise in oil prices, CBO projects that it will diminish in the second half of the year and then stay below 2.0 percent over the next several years.
At this point by my reckoning Goldman Sachs, Morgan Stanley, Macroeconomic Advisors, and any number of other banks, research firms, and independent financial advisors have decreased their estimates for 2011 growth over the last few weeks.
Perhaps I should start a pool.
- When will the Federal Reserve produce its next, decreased growth estimate? IIRC its last decreased growth estimate was about two months ago.
- When will the next round of decreased estimates begin?
- When will the NBER announce a recession and when will they say it began?