U.S. Economy May Have Bottomed Out

The Organization for Economic Cooperation and Development (OECD) is yet another economic forecasting organization that believes the U.S. economy has bottomed out. In the March 2009 Economic Outlook, released on 24 June 2009, its economist forecast 0.0 growth for the third quarter beginning 1 July 2009, and 0.5 percent growth for the fourth quarter beginning 1 Occtober 2009. The forecast growth around 1.5 percent for each quarter in 2010.

In contrast, Europe is expected to decline in the third and fourth quarters of 2009 before nudging into sluggish positive growth for the first three quarers of 2010. Growth doesn’t increae to 1.4 percent until the fourth quarter.

The report’s editorial narrative also says that the revival of the economy is a testament to good economic policy, but its not clear what policies they refer to. In the U.S., most of the Obama stimulus package won’t even hit the economy until the fourth quarter in 2009 and 2010. This suggests any positive policy impacts are likely monetary in origin, not fiscal.

More on Reason Foundation’s work on the stimulus can be found here.