It’s Going To Take More Than Rebalancing

Robert J. Samuelson of Newsweek wrote an article: Rebalancing the Economy. In the article Mr. Samuelson questions the popular view among economists that the economy, in the United States, will have a soft landing in 2007. The most recent prognosis for 2007 is that growth, as measured by the GDP, will fall between 2.6% and 3.2%, interest rates will be within ½ point of where they are now and inflation will not be a factor.

Mr. Samuelson lists three items that could have a negative impact on fairly rosy predictions for 2007: 1.) Real estate, it’s the one wild card that everyone agrees on. 2.) Autos, some feel that there is pent up demand that will boost automotive sales this year, but few think that any upswing in auto buying will help American manufacturers. 3.) Trade deficit. Contrary to contemporary opinion that it just doesn’t matter, he considers the massive outpouring of US dollars as having the potential to destabilize the economy in several ways.


The above influences are real and can have broader and deeper effects on the economy than is discussed in the article, but the one factor that’s not covered is the outpouring of jobs. If something does cause us to slip into a recession, what sector will pull us out.