2014 was predicted to be the best year for the economy since 2005, with a strong rebound by the housing sector and accelerating manufacturing growth. After six months, none have yet to materialize. A pivotal third quarter will be the difference between hope and stagnation.
Manufacturers need a gangbusters second half if 2014 is going to be a year of meaningful growth. The third quarter, now begun, will be pivotal, because the breakout year everyone expected has not materialized so far and the above-3 percent annual growth that's tied to it hangs in the balance.
Economists remain hopeful of a second-quarter surge after a winter of discontent, but that would merely get us out of a miserable first-quarter hole of negative 2.9 percent GDP. Even a positive 3 percent second quarter is looking like a tall order now; through May, the big indicators like industrial production
, factory orders
, and exports
have sputtered. ISM's manufacturing PMI
had a lukewarm June, as well, nixing any notion of accelerating growth.
One good piece of news is that job growth has been strongest since the start of the millennium. A continued healthy jobs picture should further lift consumer confidence, but unfortunately, even this has yet to trigger consistently higher personal expenditures
, which drive 70 percent of GDP. And troubling, too, is a housing sector
that still has yet to prove those forecasts of a sharp 2014 rebound that got everyone excited. The bottom line is 2014 is still not clicking into high gear after six months, which begs the question: Will that eagerly awaited surge come soon, or is 2014 dying on the vine?
William Ng, Editor-in-Chief