Moody's Analytics US Macro Outlook: The Fiscal Countdown Begins
NEW YORK - (BUSINESS WIRE) - Moody's Analytics, a leading independent provider of economic forecasting, today released Chief Economist Mark Zandi's US economic outlook for November. According to "U.S. Macro Outlook: The Fiscal Countdown Begins," unless the Obama administration and House Republicans can agree on federal fiscal policy, the economy will be in recession by the spring of 2013.
Moody's Analytics baseline outlook assumes that negotiations may have to extend into 2013, which will raise uncertainty and cause growth to nearly stall out in the first quarter of 2013. Once something has been agreed upon, real GDP growth of about 2% in 2013, will nearly double in 2014, and stay near 4% in 2015. Job growth will accelerate from approximately 2 million jobs per year today to nearly 3 million, and unemployment will fall definitively as job creation picks up.
"Going over the fiscal cliff or breaking the debt ceiling would have a widespread impact on the economy, nearly all of it negative. Given the suffering that would occur if policymakers don't act, therefore, the most plausible outcome is that they will," said Zandi.
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