US President Barack Obama touted upward revisions to economic growth
US President Barack Obama touted upward revisions to economic growth

Think the disappointing U.S. jobs report for December has dampened the optimism of economists about the new year? Think again.

Most economists think the dismal 74,000 increase in net hiring last month was a fluke caused by poor weather and seasonal-adjustment problems that will soon be revised away or prove to be an aberration.

The way those with a sunnier view see it, the road is clear for the U.S. to produce its fastest spurt of growth since the Great Recession. There?s no big crisis in Washington brewing, U.S. households are better off financially and businesses are raking in the profits. Nor are there any major global threats to the economy on the horizon.

Consider the new forecast by top economists at the nation?s leading bank firms. They predicting the U.S. economy will hit 3% growth in 2014 for the first time in nine years.

The forecast by the advisory panel of the American Bankers Association is no outlier, either. A rising number of economists predict the U.S. will meet or beat the 3% threshold.

?We see 2014 as somewhat of a breakout year,? said Christopher Low, chairman of the ABA?s 13-member panel and chief economist of FTN Financial.

President Barack Obama, faced with sagging poll numbers, hopes economists are right and he?s telling the public the same thing.

?I say this can be a breakthrough year for America,? Barack Obama said in a speech late last week. ?The pieces are all there to start bringing back more of the jobs that we?ve lost over the past decade.?

Government, heal thyself

So what makes 2014 different?

For starters, Washington is on track to pass budget bills to fund the government through the next two years and no new tax increases are coming down the pike. For the first time in five years Republicans and Democrats appear ready to play nice and avoid a wrenching fiscal fight that would undermine the economy again.

?A new leaf has been turned over,? said Peter Hooper, chief economist of Deutsche Bank. ?And this is huge.?

Source MarketWatch


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