Economy Now

Instant reaction and smart charts on economic trends.

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.

Overnight Avg Rate Latest Change Last Week
30 yr fixed4.08%4.24%
15 yr fixed3.19%3.23%
5/1 ARM3.36%3.46%
30 yr refi4.06%4.15%
15 yr refi3.17%3.17%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Economic Calendar
Latest ReportNext Update
Home pricesAug 28
Consumer confidenceAug 28
GDPAug 29
Manufacturing (ISM)Sept 4
JobsSept 7
Inflation (CPI)Sept 14
Retail sales Sept 14
Powered by WordPress.com VIP.
Follow

Get every new post delivered to your Inbox.

Join 83 other followers