Despite the fact that the U.S. economy is expected to grow faster than Europe’s next year, forecasts for the U.S. have been successively revised down over the last six months… as forecasts for Europe, particularly Germany, have been rising according to Goldman Sachs.
There’s been a clear divergence between falling economists’ falling sentiment for the U.S. (in solid red, below) and rising sentiment for Germany (in solid black, below). The trend in positive/negative news flow have been far different:
Here’s an explanation of the chart above from Goldman, essentially they are showing the change for a single forecast over time:
The x-axis indicates the month in which the forecasts were collected (the data are taken from Consensus Economics – an organisation that surveys several financial and economic forecasters for their estimates of a range of macro variables). The y-axis indicates the change in the consensus estimate of 2011 GDP growth from month-to-month. The chart therefore illustrates the marginal impact of new information over the last six months on the mean forecast for economic growth in 2011 for a selection of European countries and the US.