The US economy is primed for "faster growth," which means today's Presidential election, whoever triumphs, is "a good one to win," Lexington, Mass.- and Philadelphia-based IHS Global Insight (a successor to Wharton Econometrics) writes in its Election Day report. (Corrected)
"Credit conditions are gradually easing, and household demand for the traditional drivers of recovery—vehicles and houses—is gaining momentum," IHS's Nigel Gault adds, in a report to clients.
There's still plenty of "uncertainty" from Europe and China and foreign demand. If that uncertainty "clears only gradually," and if a divided US government takes its time sorting out a new budget, the US economy only starts accelerating... after next year, Gault projects.
But once it gets going... "Over the term of the next president (first-quarter 2013 to first-quarter 2017), we anticipate 9.75 million jobs being added (roughly 200,000 per month), and the unemployment rate dropping to 6.0%."
This fall still looks cold: "We expect only 1.0% growth in the fourth quarter, as defense spending goes into reverse and the disruptive effects of Hurricane Sandy pull down activity. But that should set the stage for a first-quarter bounce in growth, to 2.5%, as rebuilding effects turn Sandy into a plus for GDP growth and as the drag from the drought on farm inventories disappears..."
What about the federal budget? "Should Governor Romney win the election, it is likely that the key deadlines will quickly be postponed for a full year to give the incoming administration enough time to prepare alternative plans (although the payroll tax cut would probably not survive).
"Should President Obama win reelection, there is a bigger risk that the fiscal cliff will not be resolved at an early date, and even that we may briefly go off the cliff in early 2013 before an agreement is reached..."
Ah, but there's Ben Bernanke's Fed to shield the government while it fights itself: "We assume that the Fed will keep the federal funds rate near zero through mid-2015, in line with its current guidance.
"Should Governor Romney win the election, that timetable could be accelerated, depending on how hawkish is his choice to succeed Fed Chairman Bernanke in 2014."