You know what side of the fence Nouriel Roubini is on:
Among the hard landing pessimists, David Rosenberg – U.S. economist for Merrill Lynch – is very thoughtful. While he is – like me – pessimistic about 2007 he has recently argued that a series of six factors may keep Q1 growth better than expected. These factors include: “a delayed boost to retail sales as consumers use their holiday-season gift cards, the upcoming introduction of Microsoft's Vista operating system (which is shifting the timing of some capital spending plans), the late Chinese new year (which influences the timing of exports), government spending patterns and distortions introduced by the weather. Another reason is the decline in energy prices, which is giving a lift to real income.”
Of these six factors I see low oil prices and the unseasonably warm weather as the most important ones that may temporarily boost growth to 2.5% in Q1.
Well, OK, but wouldn't it be just as fair to say that the rapid acceleration in oil prices suffered over the first three-quarters of the year temporarily restrained growth in the last part of the year? And though it seems reasonable to argue that favorable weather may be providing a winter boost to economic activity, and though it may very well be that this in whole or part represents a shift in business activity that would have otherwise been realized in the spring and summer, doesn't that at least imply that the business was there to shift? And doesn't that imply that the more pessimistic scenarios were not quite on target?
It's all how you look at it.