DON'T WORRY, BE HAPPY
A real gem from today's Wall Street Journal (sub. required):
Federal Reserve officials expect housing prices eventually to level off and restrain consumer spending. But they believe business investment and exports will increase by then and pick up the slack, maintaining overall growth for the U.S. economy.Hmmm.
Real US nonresidential investment grew 10.6% in 2004, not terribly far below the pace of the roaring 90s when annual real nonresidential investment growth from 1991-99 averaged 12.7% a year. Real US exports grew 8.6% in 2004, just about the pace of the roaring 90s when annual real export growth from 1991-99 averaged 8.9%. And yet we're supposed to see a major increase in both nonresidential investment and exports after the housing bubble comfortably plateaus??