Economy Poised for Surge, Says 'Most Accurate' Forecaster

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Robert MacIntosh, chief economist at Boston-based Eaton Vance Management, was the most pessimistic forecaster on employment this year—and the most accurate. He expected unemployment to reach 10 percent in the fourth quarter and average 9 percent this year.

26-Year High

The rate fell to 10 percent in November from a 26-year high of 10.2 percent the previous month, according to the Labor Department.

MacIntosh, 52, agrees with Maki that the economy will rebound in 2010, forecasting growth of 3.5 percent, and that the jobless rate will average 9.5 percent.

"The combination of exports, investment and consumption will be enough to give us, on paper at least, a decent-looking economy," said MacIntosh, a graduate of Harvard University in Cambridge, Massachusetts, with an MBA from Dartmouth College in Hanover, New Hampshire. He manages $4 billion in municipal bonds for Eaton Vance.

He sees an "upward trend" in payrolls, with the first positive reading coming as early as January. The gains in hiring will lower unemployment "modestly," he said.

Pick Rising

Hatzius and the economists at Goldman Sachs project the unemployment rate will average 10.3 percent next year, compared with a median estimate of 10 percent for 58 responses in this month's survey.

Bart van Ark, chief economist at the Conference Board, a New York-based research firm, forecasts a 10.4 percent average unemployment rate next year that he said will restrain household purchases.

Van Ark, the best forecaster of consumer spending for the period from January through September, said he sees household purchases rising 1 percent in 2010 after falling 0.6 percent this year. Maki forecasts a 2.1 percent gain in 2010.

"Even though we do see a pickup in recent quarters, it's not a signal that the consumer is going to lead us out of the recession into solid growth territory," said van Ark, a 49-year-old Dutch native. "The consumer cannot play that role" any longer.

                       Bloomberg Rankings

===================  GROSS DOMESTIC PRODUCT  ==================
            (All estimates from survey in January)
---------------------------------------------------------------
                       1Q    1Q      2Q    2Q      3Q    3Q
Economist/Firm         Est.  Actual  Est.  Actual  Est.  Actual
---------------------------------------------------------------
Dean Maki              -4.5   -6.4   -1.0   -0.7   2.0   2.2
  Barclays Capital
Neal Soss              -4.5   -6.4   -1.0   -0.7   1.8   2.2
  Credit Suisse
John Lonski            -3.7   -6.4   -1.2   -0.7   2.4   2.2
  Moody's Capital
---------------------------------------------------------------
---------------------------------------------------------------

======================  UNEMPLOYMENT RATE  ====================
            (All estimates from survey in January)
---------------------------------------------------------------
                       1Q   Actual   2Q   Actual   3Q   Actual
Economist/Firm         Est. End 1Q   Est. End 2Q   Est. End 3Q
---------------------------------------------------------------
Robert MacIntosh       8.0   8.5     9.0   9.5     9.5   9.8
  Eaton Vance
Richard Berner         8.0   8.5     8.8   9.5     9.2   9.8
  Morgan Stanley
Joshua Shapiro         7.8   8.5     8.5   9.5     9.0   9.8
  MFR Inc.
---------------------------------------------------------------
---------------------------------------------------------------

======================  CONSUMER SPENDING  ====================
            (All estimates from survey in January)
---------------------------------------------------------------
                       1Q    1Q      2Q    2Q      3Q    3Q
Economist/Firm         Est.  Actual  Est.  Actual  Est.  Actual
---------------------------------------------------------------
Bart van Ark           -1.4    0.6   -0.6   -0.9   1.7   2.8
  Conference Board
Peter Kretzmer         -1.2    0.6   -0.7   -0.9   1.3   2.8
  Banc of America
John Dunham             0.0    0.6    0.5   -0.9   1.2   2.8
  Guerilla Economics
---------------------------------------------------------------
---------------------------------------------------------------