Some Things Old, Some Things New: Predictions for 2021

The old year has ended. (We stayed awake past midnight on New Year’s Eve, just to be sure.) Looking ahead, we’ve compiled an assortment of predictions for those who prefer not to rely on their own crystal balls to anticipate what the coming year will bring.

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If you’re looking for consistency, you won’t find it in recent economic reports, which seem to reflect the oft-heard complaint that economists “point in all directions.”  Underscoring that point, Barron’s reported recently that the International Monetary Fund has scaled back its forecast for this year “as economic pessimism grows,” while a Housing Wire headline announced much more cheerfully that “Recession Fears Diminish as the Nation Approaches a Goldilocks Economy.” 

If you believe a ground hog can predict the weather, we should expect an early spring:  Punxsutawney Phil did not see his shadow when he emerged from his winter home this month.  On the other hand, this famous Philadelphia rodent is almost always wrong, so perhaps it’s best not to put away the parkas and gloves just yet.  We might also hope the housing statistics will be an equally inaccurate predicter of the market outlook, because early indicators have not been positive. 

“Everyone can relax.”  That conclusion from a Wall Street Journal report, reflected the consensus exhale accompanying the March employment report.  Employers added 196,000 jobs for the month, beating analysts’ expectations and pretty much erasing the fears stirred by February’s stunningly anemic   20,000 gain. That total was revised upward to 33,000,  The statistical adjustments also added another 1,000 jobs to the robust January total, boosting it to 312,000. 

“Patience” was the byword for the Federal Reserve, driving a unanimous decision by the policy-making Federal Open Market Committee to stand pat on interest rates for now, and producing a decidedly less hawkish tone in the statement released after the committee’s January meeting.