The Blue Chip Economic Indicators, a regular poll of top economists, says that GDP rose 3.2% in the period. This data, collected last week, is .2% better than the forecast from a month ago.
The caution from the survey is that GDP growth for the current quarter will probably only be 2.4%. One-time events like the “cash for clunkers’ program helped Q3. The economists also expected that joblessness will average 10% over the next three quarters.
The Blue Chip forecast does not get into the issue of a double-dip recession, but the predictions from the survey point to the growing likelihood of one. GDP will move down quarter-over-quarter in the final two periods of the year and from October 1 to June 30, joblessness will be at a level unprecedented in the modern economy both in its depth and its duration.
There is no economic model which is set up to accurately show what the effects of devastating joblessness will do to consumer spending and business profits. The uncharted territory makes normal forecasting impossible and creating policy decisions to help the economy all the more difficult.
The Blue Chip survey really only points to a single good quarter. Its whispered message is that the economy could still get much worse again.
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