Wharton's Siegel sees 4-5 percent GDP growth in 2010

Thanksgiving is as much about anticipation as it is about the feast. There’s the smell of the turkey cooking in the oven and waiting for the guests to arrive.

There’s also a lot of anticipation right now about the recovery of the U.S. economy. Many signs point to the recession’s end, but it still doesn’t feel very good. It never does until the job market snaps back.

We’ve been told not to expect major gains in employment until the second half of 2010, and that means consumers won’t be splurging on holiday shopping.

But one man who can still make you think that better days are close is Wharton finance professor Jeremy Siegel.

Regardless of whether you agree with his effervescent advocacy for stocks as investments, Siegel wields statistics effectively in making his case that the U.S. economy is poised for a bounce. He shared his view at last week’s Founder Factory event in West Philadelphia.

Siegel says he sees gross domestic product rising 4 percent to 5 percent in 2010. That’s much higher than consensus forecasts. A Bloomberg survey of economists shows the median projection for GDP growth for 2010 to be 2.6 percent. The Federal Reserve Bank of Philadelphia’s latest Survey of Professional Forecasters pegs it at 2.4 percent.

On Tuesday, the Commerce Department revised its third-quarter estimate of real GDP to 2.8 percent from an initial 3.5 percent.

One reason Siegel is more bullish is the trend in productivity - each worker is producing more per hour. He noted that third-quarter productivity growth was an eye-popping 9.5 percent, following a 6.1 percent rise in the second quarter.

Such growth in consecutive quarters doesn’t happen often. During the second and third quarters of 2003, productivity rose 5.3 percent and 9.7 percent.

Productivity growth is the key to corporate profitability, Siegel said. The layoffs, plant closings, and spending cuts that American businesses have engineered “all falls to the bottom line,” he said.

Siegel said 75 percent to 80 percent of the Standard & Poor’s 500 companies beat analyst estimates with their latest quarterly earnings - much higher than the norm of 60 percent to 65 percent.

Are we getting hungry for 2010 yet?