Economist Zandi sees more moderate effects of spending sequester

“Judging by the recent slide in consumer confidence, households were surprised by their smaller paychecks. Retailers are sure to feel the fallout soon,” he wrote. 

After 2013, Zandi foresees a strong rebound as the economy adjusts to the looming budget cuts, which are slated to continue for the next eight years, and as the Federal Reserve continues an easy money policy. 

“Fiscal austerity ensures the economy will struggle in coming months, but monetary stimulus ensures that it will continue to grow,” he said. “Growth will accelerate to near 3 percent during the second half and approach 4 percent in 2014-15.”

He predicts unemployment falling from 7.9 percent to 6 percent by 2016, ahead of the next presidential election.