This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Moody’s Analytics 2013 Macro US Outlook: Economy Poised For Growth

Moody’s Analytics, a leading independent provider of economic forecasting, today released Chief Economist Mark Zandi’s US economic outlook for 2013. According to “ U.S. Macro Outlook 2013: Poised for Liftoff,” fiscal policy will continue to drag on US growth in 2013, but the economy should gain traction by the second half of year, powered by a reviving private sector.

Moody’s Analytics baseline outlook assumes that lawmakers will agree on a comprehensive budget plan in early 2013. The plan would scale back tax hikes and spending cuts now set to take effect in January, raise the Treasury’s statutory debt ceiling, and lay out a credible path to fiscal sustainability.

According to the report, there are various ways for Congress to do this, but each would add some fiscal drag. The most likely agreement would: allow the 2011-12 payroll tax holiday to expire; phase out the emergency unemployment insurance program; end the Bush-era tax rates for households with income of more than $250,000 per year; and allow taxes to rise on higher-income households to help pay for healthcare reform. Together, these changes will produce fiscal drag equal to 1.25% of GDP in 2013.

“The impediment to growth will be significant – particularly during the first half of next year – but manageable,” Zandi said. “With some additional clarity from policymakers on taxes and budgets, businesses, banks and households should all become more aggressive in investing, hiring, lending and spending.”

US companies are in especially good shape. They significantly lowered their costs structures during the recession, and have kept unit labor costs unchanged since the downturn. Profit margins thus expanded and lower interest rates have allowed firms to lighten their debts and generate cash. Banks are also well positioned for growth, since they raised hundreds of billions in new capital and adhered to tighter underwriting standards, improving credit conditions. While household balance sheets have not uniformly improved, the debt service burden – the proportion of after-tax income needed to stay current on outstanding debt – will soon be at record lows.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.24 -0.41%
FB $117.81 -0.21%
GOOG $701.43 0.82%
TSLA $211.53 -4.96%
YHOO $36.94 2.61%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs