Despite unambiguous data showing the U.S. economy is slowing, U.S. exports are expected to make strong showings this year and next. A weaker U.S. dollar and surprisingly strong global economic growth are expected to result in 8.6% growth in U.S. exports this year and 8.5% growth in 2007, says Cliff Waldman, an economist at the Manufacturers Alliance, an Arlington, Va.-based business and public policy research group.
"The recent and unexpected acceleration of growth in China, continued strength in other emerging markets such as India, positive momentum in the Eurozone, and modest but firm domestic demand in Japan have for the moment trumped concerns about a slowing U.S. economy," the alliance says.
As for the U.S., Waldman is forecasting 3.3% inflation-adjusted GDP growth this year and 2.5% in 2007. Factory output, he projects, will increase 5% this year and just 2.5% next year. Core inflation will run 2.6% this year and 2.4% in 2007, he believes.