While one week remains in the year, we think it’s safe to claim that our small business centric predictions regarding 2014’s U.S. economy crushed the “consensus prediction” of U.S. economists.
If you haven’t been keeping up with our Main Street vs. Ivory Tower match up, on the first day of 2014, we predicted the following:
The economy will expand at a pace far more robust than the “consensus economists” predict: After several years of post-recession tepid growth far below historical patterns, the boys-on-the bus economists are now so shell-shocked, they don’t know how to predict anything higher than a 3% growth in GDP, which is yet again their 2014 prediction…. I predict a 4.5% GDP growth for the year.
Why?
- I believe gasoline pump prices will trend downwards, serving as the equivalent to a tax cut for consumers.
- I believe there is pent up demand for business- and manufacturing-related technology and equipment.
- I believe there is pent up demand for construction and related industries, causing them to expand faster than anticipated–and create more jobs than predicted.
- I believe the Fed’s ratcheting down of “quantitative easing” will slow down stock market speculators and day traders, but have little impact on the general economy.
So let’s hit the highlights one year later:
Predictions:
- 12/31/2013 – SmallBusiness.com: 4.5%
- 12/31/2013 – Economists (Consensus): 3%
While we won’t know the final outcome of our predictions until the end of January, this much we know as of today:
According to WSJ.com, the U.S. economy posted its strongest growth in 11 years during the third quarter, supported by a robust consumer spending and business investment. (See: Reason #2 above as to why we predicted robust growth.)
Just how robust?
According to updated estimates released today by the U.S. Bureau of Economic Analysis (BEA), the U.S. economy as measured by the GDP, increased during the third quarter at an annual rate of 5.0 percent.
In other words:
- 12/31/2013 – SmallBusiness.com: 4.5%
- 12/31/2013 – Economists (Consensus): 3%
- 12/23/2014 – BEA estimate of annual growth rate based on performance during third quarter: 5%
Need more proof that consumers and businesses have left economists in the dust?
Other numbers released today: “Americans are shopping for clothing, electronics and automobiles as surging employment and the lowest gasoline costs since 2009 bolster confidence and expand buying power.” (via Bloomberg.com)
(Photo: SmallBusiness.com)