The coming 'economic renaissance'November 15, 2012: 7:31 PM ET
Could an energy boom, a housing recovery and easy money from the Federal Reserve be the perfect mix for an American revival? Consulting firm Oxford Economics certainly thinks so.
New forecasts released by the firm predict the U.S. is on the brink of an "economic renaissance," with economic growth accelerating to more than 3% a year starting in late 2013. (Gross domestic product is currently growing around 2% a year.)
The key contributors could include an increase in U.S. exports and a boom in domestic energy production.
Perhaps most importantly though, the firm expects a rebound in private sector spending. Consumer debt has already fallen back to pre-recession levels, and as the housing recovery takes hold, household wealth is likely to rebound too. That's key considering consumer spending accounts for more than two-thirds of the U.S. economy.
Oxford Economics also believes the Fed's current round of quantitative easing -- under which it buys $40 billion a month in mortgage-backed securities -- will add 1% to U.S. GDP over the next two years and reduce the unemployment rate by 0.4 percentage points. (The unemployment rate stood at 7.9% as of October.)
Meanwhile, the fiscal cliff is likely to be merely a "temporary speed bump," the firm said.
"Oxford believes it's very unlikely that the U.S. will fall over the fiscal cliff and stay there," the report said.