The U.S. economy has come a long way since the financial crisis. And 2014 is increasingly looking like the year that it could
exit the “new normal,”the extended period of sub-par growth described by PIMCO’s Mohamed El-Erian.
“The economy looks to be creating 200K or more jobs in three out of the last four months,” said Chris Rupkey, the top U.S. economist at Bank of Japan-Mitsubishi. “US exports are setting all-time records, even sales to Europe are improving.”
“It looks like the economy is shaking off the uncertainty from Washington, and in 2014 the economy is finally going to have the wind at its back, making the dreams of 3% real GDP finally become a reality,” he added.
Economic acceleration is Wall Street’s consensus for 2014 and 2015.
“As 2013 draws to a close, the global economy looks to be exiting the slowdown of the past three years and entering a new phase of modest recovery and growth,” wrote Willem Buiter, Citi’s Chief Economist, in a note to clients earlier this week. “The trademark of 2014 appears to be that of incremental improvements. Yet, consistent, marginal improvement is, for this day and age, revolutionary.”
“The government shutdown is a transitory drag that has delayed an inflection point in the recovery by one quarter,” said Morgan Stanley’s Vincent Reinhart earlier this week. “Final demand is strengthening as we move toward the New Year and the pieces remain in place for growth to shift into higher gear.”
It’s “The End Of The End Of The World,” says Nomura’s Michael Kurtz.
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