An energetic 2011 economy is the consensus forecast

The Wall Street Journal is reporting this morning the results of an economists survey it routinely conducts.  Economists are polled for their opinion about the U.S. economic growth prospects.  After 3 years of depressing economic news, an economic recovery distinct for its fits and starts, stubbornly high unemployment, and overall exhaustion, the economy’s statistics are strong enough that a consensus has formed around 2011 growth.

Specifically, the economists polled believe that the economy will grow faster in 2011 than it has since 2003.  In other words, an energetic and prosperous rise in gross domestic product (GDP) is expected.  Clearly, this would be a good result.  Additionally, the economists expect that the unemployment rate will exit the year at a level of 8.6%.

Further expectations have commodities prices still at inflated levels, real estate foreclosure levels high, and additional rumblings in Europe.  If you have the inclination, feel free to compare these expectations to the 2011 Predictions I made back at the end of November, but published in mid-December.

These forecasts are not noteworthy for their specifics.  Instead, the important thing is the nearly unanimous sense of the future.  This is an indication of a sense of ease, comfort and stability returning to the economy.  Consensus can only form when there are no issues to cause worry at the margin.

I am politely saying that group think occurs only when no other future is imaginable.  Better that we are at the beginning of the cycle of group think because consensus thinking always lags reality.  The consensus exiting 2007 was that the magic, candy mountain of the real estate miracle was going to continue.  Unfortunately, that was the end of a cycle.

So for today, group think is honored as a lagging indicator that things are finally better and getting better.

Jason