February 12, 2004

JEC Forecasts "Robust Growth"

Here's the new report from the Joint Economic Committee (.pdf file format). Excerpts:

(Summary)

The recovery continues at a strong pace. Payrolls increased by over 100,000 jobs in January, as activity in manufacturing and services industries accelerated. Last year closed with the economy growing at a 4% annual rate and productivity growing at a 2.7% annual rate, well above long-run averages. Inflation remains benign, allowing the Federal Reserve to maintain short-term interest rates at historical lows, and recent tax relief continues to benefit consumers and businesses. Forecasters see continued robust growth, low inflation, and accelerating job gains throughout the year.

Business Activity Continues to Strengthen

Increases in average weekly hours of work and moderation of job losses in manufacturing indicate rising activity. Confirming this trend, the Institute for Supply Management’s (ISM) manufacturing index has risen since May to its highest value since 1983. The ISM services index has also been rising and in January was the highest in its history (Figure 3). An index value above 50 means that the relevant sector is expanding. Current values of well above 60 indicate vigorous expansion in manufacturing and services.

Posted by dan at February 12, 2004 10:12 PM