Moderate Growth?

Ben Bernanke has predicted that he expects the Goldilocks economy to continue. He said that he expects economic growth to even start to increase mid year. Well, today the Institute of Supply Management's Index of non-manufacturing business, which makes up 90% of the economy, came out. And just like every other statistic that has come out in the last month, it is lower than what most "economists" expected. It fell from 59 to 54.3, which is the slowest growth in over 4 years. This statistic suggests that the slowdown in housing and manufacturing IS spreading to other sectors, which again is contrary to Bernanke's words. Half of the 18 industries surveyed, including retail, financing, and construction, reported slower earnings.

Bernanke is either lying to us, ignorant to the world (which I doubt), or the most optimistic person I know. He says no sub-prime spill over. Woops. He said the recession of the housing market wouldn't spread. Woops. He said he expects mid year increased growth. Woops. He doesn't see a recession...we will see. With me, his credibility is shrinking, not that there was much there to begin with.

I would like to make one more brief point in this post. Every freckin statistic that comes out: inflation, GDP growth, manufacturing, new home sales, etc...economists have been over optimistic on every one. Not one economist has errored on the pessimistic side. This is what I see EVERY day. Inflation...higher than predicted. New home sales...lower than predicted. GDP growth...slower than predicted. Manufacturing/orders for durable goods...less than predicted. I would like to come out with a not so bold prediction. When the unemployment statistic comes out this Friday, it will be higher than predicted. Give me a break.