The Insurance Information Institute recently compiled a series of economic projections for the remainder of 2012 for companies in the insurance industry. The following are some of their key prognostications.
- Economic growth will accelerate modestly in 2012/2013, beating expectations. There will be no double-dip recession. “Economy remains more resilient than most pundits presume.”
- Consumer confidence will continue to improve.
- Consumer spending/investment will continue to expand.
- Housing market remains weak, but some improvement is expected.
- Inflation remains tame. “Runaway inflation highly unlikely but energy spike possible; Fed has things under control.”
- Private sector hiring remains consistently positive and exceeds expectations. “Unemployment dips below 8 percent by year’s end.”
- Sovereign debt, Euro currency/economy, muni bond “crises” are “overblown.”
- European recession is milder than commonly presumed.
- China will have a soft landing.
- Higher oil prices and current Middle East turmoil pose a greater risk to the U.S. economy in 2012 than in 2011.
- Interest rates remain low by historical standards, but could edge up by year’s end.
- Stock and bond markets are more stable, less volatile.
- The political environment is more hospitable to business interests.
- “Obama wins re-election based on improving economy.”
