Merrill: Short-Term Economic Outlook Still Clouded

By John S. McClenahen Although the New York Stock Exchange initially cheered U.S. President George W. Bush's re-election, the near-term economic outlook remains clouded, judges Merrill Lynch & Co.'s David A Rosenberg, the securities firm's chief North American economist. Primary contributors to the overcast, he says, are high oil prices, the lack of fiscal stimulus, and continuing concerns over the Middle East. Plus "the 'squishy-soft' labor market and three monthly declines in consumer confidence . . . are all near-term warning signs that the 'soft patch' may not be totally over . . . ," states Rosenberg. "We are allowing for some positive effects to show through from the 'rebuilding' effect in the Southeast following the wave of hurricanes over the last few months. But, we still come up with below trend economic growth rates for this quarter and next, somewhere in the neighborhood of 2.5% at an annual rate," he says.

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