“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.
“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.