The July 2011 Wall Street Journal Economic Forecast Survey

The July Wall Street Journal Economic Forecast Survey was published July 18, 2011.  The headline is “Dearth of Demand Seen Behind Weak Hiring.”

I found various aspects of the survey to be interesting, including the following excerpts:

In the survey, conducted July 8-13 and released Monday, 53 economists—not all of whom answer every question—were asked the main reason employers aren’t hiring more readily. Of the 51 who responded to the question, 31 cited lack of demand (65%) and 14 (27%) cited uncertainty about government policy. The others said hiring overseas was more appealing.


“We’re hiring a little here and there—but it’s not what it should be,” said Daniel Cunningham, chief executive of Long-Stanton Manufacturing Co., of Hamilton, Ohio. “And it’s because of the lack of demand.” Long-Stanton, which makes metal parts for the aerospace, medical and other industries, has snapped back from the recession, “but volume is still not up to where it was, or where it should be,” Mr. Cunningham said. Long-Stanton is privately held and has 75 employees.

Mr. Cunningham said part of what makes him hesitant is the extreme volatility he sees—with business up one month, then down the next. “Instead of good years, it’s like you have a good month—or a good three months,” he says, adding that this makes it difficult for him to feel confident of steady demand.

In the Q&A section (spreadsheet detail) there is an interesting question about bubbles.  Here is the question and responses:

Please estimate on a scale of 0 to 100 the probability that there is a bubble in the following markets:

Property prices in China  64%

Gold  61%

U.S. Internet stocks  48%

U.S. Treasury Bonds  44%

Leveraged Loans  34%

Equities Generally  24%

The current average forecasts among economists polled include the following:


full-year 2011 : 2.6%

full-year 2012:  3.0%

Unemployment Rate:

December 2011: 8.8%

December 2012: 8.1%

10-Year Treasury Yield:

December 2011: 3.55%

December 2012: 4.24%


December 2011:  3.1%

December 2012:  2.4%

Crude Oil  ($ per bbl):

for 12/31/2011: $95.59

for 12/31/2012: $98.69

(note: I comment upon this survey each month; commentary on past surveys can be found under the “Economic Forecasts” category)


I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.


The Special Note summarizes my overall thoughts about our economic situation

SPX at 1301.03 as this post is written