Economist Mark Zandi is definitely in the Wall Street crowd with the belief the worst is behind us, and we soon have the second half bounce, due to supply chain fixes in Japan and a generally better environment. That said the consensus was calling for 4%+ type of GDP in Q1 and Q2, due to the Bush tax extensions and 2% payroll tax holiday, so we'll see if they get it correct this time around.
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We've seen the bulk of the slowdown….I think we're going to reaccelerate, he says. Whereas most economists, including at the Fed and IMF, now expect second half growth below 3%, Zandi predicts the U.S. economy will rebound to close to 3% growth in the third quarter and approach 4% in the fourth.
Zandi's optimism is based on a view that the first half slowdown was due mainly to rising energy prices and the dramatic downturn in Japan's economy following the devastating earthquake and Tsunami last March. Those weights are lifting, he says. The Japanese economy seems to be gaining traction, [that] augurs well for our manufacturing sector.
To be sure, Zandi is predicting a robust, V-shaped rebound and predicts the job market will remain soft, predicting another month or two of soft payrolls, around 100,000. (The consensus for Friday's June payroll report is 110,000.) Zandi predicts the headline non-farm payroll figure will start to hit 200,000 per month later this year and the unemployment rate will head toward 8% by the end of 2012.