James Smith, director of the Kenan Institute for Private Enterprise’s Center for Business Forecasting, sees plenty of growth ahead for the US economy.
“While some pundits insist on worrying about an economic calamity, it seems to be way too early to be concerned,” Smith said. “It’s a waste of time to worry about a recession now.”
Writing in the most recent newsletter from the Institute, said another recession will occur at some point — but not right away.
He forecasts a 3.9 increase in the real gross domestic product this year, and 2006 will be even better at 4.4 percent.
“That should result in more records being set for corporate profits and that should help both business fixed-investment and stock prices,” Smith wrote. “The U.S. is in a ‘virtuous cycle’ right now with rising employment, incomes and industrial production. This will also result in increases in revenues to governments at all levels.”
Recent college graduates are also finding jobs at a healthy rate, he added, noting “That’s a huge and most welcome contrast to the previous four years.”
Smith discounted inflation as a threat, said fuel prices should begin to come down, and noted that construction remains a real driving force for growth.
Kenan-Flager: www.kenan-flagler.unc.edu/KI/
