While many Americans were still pinching every penny and praying for a faster recovery from the Great Recession, John Lonski, chief capital markets economist of Moody’s Analytics, understood what our country really faced in its uphill battle toward an economic comeback. He had the most accurate U.S. forecast among the nation’s top economists for the years 2010 to 2013. Accordingly, he will be honored Oct. 16 with the prestigious Lawrence R. Klein Award for his achievements.
“I am honored to receive this award on behalf of Moody’s Analytics’ Capital Markets Research team,” Lonski says. “Given the economic uncertainty, accurate economic analysis is more important than ever to help financial institutions quantify risk and opportunities and simulate the impact of policy adjustments.”
The W. P. Carey School of Business at Arizona State University sponsors and judges the Lawrence R. Klein Award, one of the best-known and longest-standing awards in the economics profession. The annual award is named for the late Nobel Prize winner Dr. Lawrence Klein, and it goes to the individual or team with the most accurate economic forecast among the Blue Chip Economic Indicators survey participants for a four-year period. The Blue Chip newsletter has been published for almost 40 years and is regarded as the “gold standard” of business forecasts. Lonski beat out about 50 competitors for this year’s award.
“The biggest challenge of the 2010-to-2013 forecast period was to anticipate how the recovery would unfold,” explains Economics Professor Dennis Hoffman, director of the L. William Seidman Research Institute at the W. P. Carey School of Business. “John Lonski’s projections were particularly accurate for the last two years, when he called for a slow decline in the unemployment rate and nailed gross domestic product (GDP) growth at just over 2 percent.”
Lonski is an acclaimed forecaster, who contributes regularly to forecasting surveys from The Wall Street Journal, Bloomberg News, Reuters and the Philadelphia Federal Reserve Bank. He was named the top economic forecaster in The Wall Street Journal’s June 2004 survey, and he has done countless interviews for CNBC, The New York Times, Fox Business, Dow Jones, Bloomberg TV, National Public Radio and many other major media outlets. He contributes a quarterly editorial piece for Japan’s Nikkei Veritas newspaper and comments regularly in Moody’s “CreditTrends” and weekly “Market Outlook.” Prior to joining Moody’s Analytics, he worked for National Economic Research Associates.
At the Klein Award event, Lonski will deliver his 2015 forecast, “Goldilocks Redux: 2015’s Outlook for Business Activity, Inflation, and Interest Rates,” including these predictions:
• Another year of modest improvement for the U.S. economy is likely.
• The continued release of pent-up demand for autos and housing should underpin consumer spending.
• However, the subpar growth of employment income, the household-sector’s debt overhang, and the conflict between still-tighter mortgage loan standards and the diminished savings of middle-income households limit the upside for household expenditures.
• The unprecedented aging of both the population and the work force will weigh on income growth and spending.
• Ample global slack implies that a disruptive swelling of inflation risks is unlikely.
Year-end 2015’s expected ranges are .75 to 1 percent for federal funds and 3 to 3.25 percent for the 10-year Treasury yield.
• By mid-2015, the Fed should begin a measured tightening of policy.
• The heightened scrutiny of regulators may ward off the excesses of previous credit-cycle peaks.
Top industry professionals and others will attend the invitation-only award ceremony Oct. 16 at the University Club in New York, starting at 6 p.m.
VIPs expected to be in attendance include Randell E. Moore, executive editor of the Blue Chip Economic Indicators; Amy Hillman, dean of the W. P. Carey School of Business; Hannah Klein, daughter of the award namesake; and Trevor Bond, president and chief executive officer of W. P. Carey Inc. (NYSE: WPC).