On January 7, Jay Prag of the Peter F. Drucker and Matatoshi Ito Graduate School of Management expressed his opinions in forecasting the future of the economy. Today, we’ll be looking into Prag’s crystal ball and see what he believes is coming for the United States of America in 2014.
Although the US economy showing signs of improvement in the third quarter of 2013, Prag believes that people may be misled into believing that the long stalled economic recovery will finally start to roll. According to the professor, overall economic growth as measured by Gross Domestic Product will be modest, falling in at an estimated about 2.5-percent for the year, and unemployment will stick around its current level of 7-percent.
Prag saw the strong third quarter numbers as deceiving– retailers and manufacturers were preparing up for a strong Christmas that never came. Earnings and sales over the holiday season proved disappointing. That boils down to consumers not being able to find any confidence in the stability of the economy.
In addition to skeptic consumers, growth in wealth were fueled by the Federal Reserve’s unsustainable monetary policy. And when looking at the slow growth happening in Europe and many of our trading partners, a breakout year is not looking likely. Prag predicts that companies will shift more employees to fewer hours and that will slow consumer spending at the end of next year, resulting in sluggish Christmas of 2014.
