http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/http://www.fxstreet.com/fundamental/http://mediaserver.fxstreet.com/images/fxstreet-provider-logo1-en.gif7http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-11-11.htmlU.S. Overview The Recovery Shapes up but not Quite as Expected The return of economic growth during the third quarter has done little to quell the debate among economic forecasters as to what letter the economic recovery will most likely resemble. Will it be a U, V, L, W or some exotic letter from a language long gone? Our vote is for a little v, with most of the rebound in year-to-year real GDP growth occurring below the zero line. We are not expecting a double dip but do expect growth toWed, 11 Nov 2009 16:54:29 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-11-11.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-10-07.htmlU.S. Overview “The Recovery Will Be Agonizingly Slow” So it indeed has been. As this short quote from the Executive Summary of our 2009 Annual Outlook (published in December 2008) neatly summarized, the economic recovery faces a number of secular challenges that will alter the pace and composition of growth. For many decision-makers, the outlook for 2010 suggests continued change and adjustment to an altered reality of more government/less private sector contributions to growth, greaterWed, 07 Oct 2009 07:26:40 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-10-07.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-09-09.htmlU.S. Overview The Recovery Will Take Time to Build Momentum Forecasts for economic growth during the second half of this year and 2010 have been steadily ratcheted up as most of the monthly economic indicators have come in better than expected. We have raised our own estimate modestly. We now see real GDP rising at a 3.7 percent annual rate, which is 0.3 percentage points higher than one month ago. Estimates for real GDP growth during the fourth quarter and 2010 are essentially the same asWed, 09 Sep 2009 09:06:55 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-09-09.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-08-12.htmlU.S. Overview The Recovery Is Beginning to Take Shape We believe the recession ended around the middle of this year and that a recovery has begun to take hold. Real GDP is expected to rise at a 3.4 percent pace in the third quarter and average a 3.0 percent pace for the second half of this year. The improved outlook reflects recent revisions to the underlying GDP data and a sharp reduction in inventories. The initial success of the cash for clunkers trade-in program has also bolstered ourWed, 12 Aug 2009 11:50:02 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-08-12.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-07-08.htmlU.S. Overview Not Out of the Woods Yet Optimism about the apparent ending of the recession has been tempered by the reality of substantial further deterioration in employment conditions and ongoing struggles with state and local government budgets. Real GDP is expected to rise slightly during the third quarter as inventory liquidations slow dramatically and consumer spending is revived. The ending of the recession, however, does not mark the end of the economy’s troubles. Economic activityWed, 08 Jul 2009 07:07:10 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-07-08.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-06-10.htmlU.S. Overview Despite Severe Headwinds, a Recovery is Near Our forecast incorporates the improved tone of recent economic reports as well as the anticipated bounce-back in motor vehicle production from the current severely depressed levels in the third quarter. We now expect third quarter GDP to be solidly positive, which means the recession will likely end this summer. While the recession may be finally coming to an end, significant challenges remain. The housing bust is still playing out,Wed, 10 Jun 2009 06:52:58 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-06-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-05-13.htmlU.S. Overview Economic Recovery: Unusual Shape, Unusual Style Despite the volatility of monthly economic releases and policy prescriptions, surprisingly little in the outlook has deviated from the pattern of the recovery as outlined in our annual outlook published last December. Economic recovery is expected to start later this year. Weakness in consumer spending has begun to give way to gradual improvement. Business spending continues to decline. Housing remains weak. A significant inventoryWed, 13 May 2009 10:24:06 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-05-13.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-04-08.htmlU.S. Overview Recovery is in the Mind of the Beholder We continue to expect the economic recovery to start late this year. Yet we see the recovery as being different in both character (less diversified) and strength (weaker) relative to past recoveries. Therefore, we believe the recovery will be disappointing to both citizens and policymakers. Such disappointment means more difficult decisions in the next three years. Economics is the science of choices and tradeoffs. Our outlook suggests thatWed, 08 Apr 2009 07:46:03 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-04-08.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-03-11.htmlU.S. Overview Yes We Can Recover! We continue to believe the fourth quarter of 2008 and the first quarter of 2009 will mark the darkest hours of this recession. Output, employment and consumer spending will likely remain under pressure for all of this year and possibly into the early part of next year. The recession will eventually end and we see the bottom occurring in either the fourth quarter of 2009 or first quarter of 2010. The end of the recession, however, will not mark the end of theWed, 11 Mar 2009 17:44:20 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-03-11.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-02-13.htmlU.S. Overview We Have Seen This Movie Before Throughout this financial crisis there have been endless comparisons between today’s environment and the 1930s. We feel a more apt comparison is the deep 1973-75 recession, a period that also dealt with an oil price shock, a housing collapse and a banking crisis. Even then these problems were global, with housing slumping not only in America but in Europe and parts of the developing world. The early 1970s economic and geopolitical environment wasFri, 13 Feb 2009 10:57:29 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-02-13.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-01-14.htmlU.S. Overview Worst May be Over, but We Have Long Way to Go Real economic activity fell off a cliff during the fourth quarter, producing a sharp drop in employment, output and spending. More than 1.5 million jobs were lost during the period and total hours worked plummeted at a 7.7 percent annual rate. Real GDP did not likely decline that much, as faltering demand in the U.S. cut demand for imports and thus exported a good part of U.S. weakness. We currently expect real GDP to decline at a 5.3Wed, 14 Jan 2009 09:28:11 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2009-01-14.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-11-13.htmlU.S. Overview A Serious Recession Has Set In While the NBER will not likely get around to declaring when a recession began until late January or early February, there is little doubt a serious recession has set in. Real GDP declined at a modest 0.3 percent pace in the third quarter and more recent data have been decidedly more negative. Nonfarm payrolls fell 240,000 in October, following a much larger-than-initially-reported 279,000 job loss in September. Not only has the pace of economicThu, 13 Nov 2008 08:11:15 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-11-13.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-10-09.htmlU.S. Overview The Only Certainty Today Is Uncertainty The incredible volatility in the financial markets is not only dominating the headlines but also dramatically reshaping the economic outlook. Capital is much harder to come by today for even the strongest of credits and this is already having a debilitating impact on consumer spending, business fixed investment and employment. Our near-term forecast has been slashed and a recession is now underway. We expect three consecutive quarters ofThu, 09 Oct 2008 09:12:06 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-10-09.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-09-10.htmlU.S. Overview The next few quarters will be the most trying time for the U.S. economy in the past two decades. Our forecast has real GDP rising at a 1.9 percent pace over the next year and real final sales to domestic purchasers rising at just a 0.6 percent pace. Conditions will feel even weaker than this. Overall consumer spending is expected to decline in both the third and fourth quarters, while spending on goods should drop in three of the next four quarters. Consumer spending is beingWed, 10 Sep 2008 10:08:14 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-09-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-08-06.htmlU.S. Overview Has The U.S. Come Down With German Disease? Much of the benefit from the economic stimulus checks was siphoned away by higher energy prices during the early summer months. As a result, most of the benefit from the rebate checks showed up in the May consumer spending figures. Spending weakened in June, particularly for big-ticket discretionary items. Motor vehicle sales declined even further in July, hitting their lowest level in 15 years. The net result should be an outrightWed, 06 Aug 2008 16:37:36 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-08-06.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-07-10.htmlU.S. Overview Sub-Par Growth: Economic Workout Continues Once again, we are faced with the hard reality that the economic workout continues, keeping pressure on profits and household incomes. There is no easy-out for the economy. We expect continued weakness in consumer spending, residential investment and capital spending in the second half of this year. In contrast, government spending and net exports should maintain positive momentum. Overall, our expectation is that real final sales willThu, 10 Jul 2008 08:14:16 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-07-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-06-11.htmlU.S. Overview Sub-Par Growth: Economic Workout Continues Our outlook remains for sub-par growth with weakness continuing in consumer spending, residential investment and capital spending for the second half of this year. In contrast, government and net exports should continue their positive momentum. Overall, our expectation is that real final sales will grow at only one percent in the second half of this year compared to 2.5 percent for all of 2007. Inflation, as measured by the core PCEWed, 11 Jun 2008 10:44:00 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-06-11.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-05-08.htmlU.S. Overview Our forecast is now slightly more optimistic than it was a month earlier. We are no longer looking for real GDP to decline during the second quarter and also expect the economy to eke out modest gains for the year as a whole. Our slightly more optimistic take on the near-term economic environment should not be confused with optimism about the overall state of the economy. Growth is almost entirely being driven by improvement in the trade deficit and modest gains in governmentThu, 08 May 2008 08:26:18 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-05-08.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-04-10.htmlU.S. Overview Now that nonfarm employment has declined for three straight months, virtually all economists have conceded the U.S. economy is in recession. Ironically, the data are not nearly as accommodating. First quarter real GDP will likely be slightly positive, rising at a 0.6 percent pace. We do see real GDP slipping into negative territory during the second quarter, but only modestly, falling at a 0.7 percent pace. We have often noted that economics is just common sense made difficultThu, 10 Apr 2008 09:15:09 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2008-04-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-11-07.htmlThe resiliency of the U.S. economy continues to astound market commentators, many of whom are relentlessly focusing on what is going wrong in the economy and ignoring what is doing well. Real GDP expanded at a 3.9 percent pace in the third quarter and is up 2.6 percent over the past year. To be honest, it certainly does not feel like the economy is growing this fast. We do not question the validity of the GDP numbers, however. The reason the economy does not feel this strong is that there is aWed, 07 Nov 2007 17:30:48 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-11-07.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-09-13.htmlWe continue to struggle to balance near-term concerns about events in the credit markets with the most recent economic data, which have mostly come in ahead of expectations. The one notable exception is the August nonfarm employment data, which posted a surprising 4K job loss in August. The drop has rekindled fears that the faltering market for new and existing homes will trigger cutbacks in consumer spending and business fixed investment. Talk of a recession has also resurfaced, although weThu, 13 Sep 2007 10:04:35 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-09-13.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-07-19.htmlSecond quarter economic growth will likely bounce back at around a 3.5 percent pace, reflecting a turnaround in business inventories and international trade, along with some modest improvement in business fixed investment. Meanwhile, consumer spending cooled off considerably during the second quarter. Sharply higher gasoline prices, rising mortgage rates and the reduced pace of home price appreciation all served to limit spending power. Risks to the economy and financial markets have clearlyThu, 19 Jul 2007 07:33:31 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-07-19.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-06-07.htmlEconomic growth is now widely expected to bounce back solidly from the tepid 0.6 percent pace posted during the first quarter. A consensus seems to be building around real GDP growth rising in the 3 percent range during the current quarter. We see economic activity expanding at a slightly faster rate, with output climbing at a 3.5 percent pace. The improved economic outlook largely results from a couple of strong reports on factory orders, particularly for nondefense capital goods, and muchThu, 07 Jun 2007 08:55:21 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-06-07.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-05-10.htmlFor sometime now decision–makers have faced the undynamic duo of below trend growth and above target inflation. During the typical mid-cycle of an economic expansion, slower growth is not unusual, but what is unusual is the length of the current period of below trend growth. Higher inflation is also not unusual, but this time the pace of inflation remains above the Federal Reserve’s target ceiling and that closes the door on any easing unless the economy weakens even more. Without above trendThu, 10 May 2007 08:38:42 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-05-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-04-12.htmlFor decision–makers the fraternal twin challenges of below trend growth and above target inflation suggest a strategy of caution and balance sheet repair at this stage of the business cycle. During the typical mid-cycle of an economic expansion, slower growth is not unusual, but what is unusual is the length of the current period of below trend growth. Higher inflation is also not unusual, but this time the pace of inflation remains above the Federal Reserve’s target ceiling and that closesThu, 12 Apr 2007 08:55:35 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-04-12.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-02-08.htmlThe U.S. economy is once again proving its resilience, largely shrugging off the dampening effects of the weakening housing market and cutbacks in the domestic motor vehicle industry. Real GDP finished 2006 on a strong note, with overall growth expanding at a 3.5 percent annualized rate. Some of this momentum will spill over into 2007. We have raised our estimate for GDP growth this year to 2.6 percent, based largely on the recent strength in consumer spending and what appears to be theThu, 08 Feb 2007 09:27:01 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-02-08.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-01-11.htmlUnseasonably warm weather appears to have contributed to a slight pick up in overall economic activity during the later part of 2006. Data on home sales, consumer spending and factory output all perked up toward the end of the year, while energy prices weakened and the trade deficit shrank. Some of this strength, however, should prove illusory. Housing and motor vehicle production are still major drags on output, with residential construction expected to slice another percentage point offThu, 11 Jan 2007 10:53:00 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2007-01-11.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2006-09-11.htmlTheme and Variations: Classical Economics Two themes continue to frame our outlook. Growth is moderating toward a slightly below trend pace. Second, inflationary pressures remain in place. The net result is that there is no recession in the year ahead. We also hold to an expectation of no change in Fed policy for the rest of the year.Mon, 11 Sep 2006 16:00:05 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2006-09-11.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2006-07-18.htmlThere is little doubt that economic growth is slowing.Tue, 18 Jul 2006 12:02:23 GMThttp://www.fxstreet.com/fundamental/analysis-reports/sam.bullard@wachovia.com (Wells Fargo Investments, LLC)http://www.fxstreet.com/fundamental/analysis-reports/monthly-economic-outlook/2006-07-18.html