Not So Happy New Year

摘要

Just as the stock market bubble artificially prolonged the U.S. economic expansion in 1999 and most of 2000, the housing bubble stimulated the American economy in 2004 and 2005. But it has now ended. The only question for 2006: soft landing or hard? Uncharacteristically, my answer is: It all depends. O.K., having danced around the subject, I'll give you my 2006 forecast: inflation-adjusted GDP growth of 2.5%. For those who care about these things, that's really 1.5% growth because in the economic figuring, a phony number adds a percentage point. Since productivity is really rising about 1.8%, this means the unemployment rate will increase about three-tenths of a percentage point during 2006.