Merrill's Rosenberg: U.S. Slowdown Is Starting Now

April 14, 2005
U.S. manufacturing executives who have remained cautious about capital spending and workforce expansion are looking like better forecasters than economists who have been predicting first-quarter inflation-adjusted U.S. GDP growth would come in well above ...

U.S. manufacturing executives who have remained cautious about capital spending and workforce expansion are looking like better forecasters than economists who have been predicting first-quarter inflation-adjusted U.S. GDP growth would come in well above a 4% annual rate and stay respectability high during the rest of 2005.

"What is interesting is that the slowdown is actually starting now," stated David A. Rosenberg, Merrill Lynch & Co.'s chief North American economist during a conference call on April 13. Merrill's economists, who had been forecasting an annualized GDP growth rate of 4.3% for January through March, now figure growth could be as low 3.5%, just about the long-term potential growth rate of the U.S. economy.

And Rosenberg doesn't see consumer spending giving a boost to GDP growth during the current calendar quarter. "There is absolutely no momentum, nada, being built into consumer spending as we move into" the second quarter, he asserted.

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