December 23, 2016
Ex-Philip Morris economist sees US economy shrinking 1.5% in 2017
Look down to the very bottom on the Bloomberg list of estimates for US economic
growth next year and you will find John Dunham. The Brooklynbased economist
stands alone in a survey that includes 89 of his peers in projecting a fall in
American output next year.
Most of the big Wall Street banks sing in unison in their forecast for 2017: they
expect another year of modest economic growth, roughly in the range of 2 per cent.
Business investment may rebound, the energy sector is looking stronger, and the
fiscal policies proposed by Presidentelect Donald Trump could provide a modest
But Mr Dunham, president of John Dunham & Associates and
previously a senior economist at the tobacco giant Philip Morris,
has a drearier outlook. He forecasts a fall of 1.5 per cent next year
thanks to a threequarter recession that begins in the second
Mr Dunham cautioned that it is famously difficult to call exactly
when a recession will begin, but that there are indications that the
fourthlongest US expansion since the mid19th Century is showing signs of
“We are well past the point where it should have topped out,” he said.
The economist, who primarily focuses on crafting microeconomic analyses for
lobbying groups, pointed to restaurant sales as a “big canary in a coal mine”.
Indeed, samestore sales across the US restaurant industry were down by 1.3 per
cent in November, representing the ninthstraight decline and the worst reading since July, according to a survey by research group TDn2K.
Other metrics are flashing warnings signs, too, said Mr Dunham. He points, for
instance, to the fall in the US jobless rate in November to 4.6 per cent as suggesting
there is not much room for additional labour market gains, while productivity
growth has continually disappointed.
© THE FINANCIAL TIMES LTD 2016. FT and ‘Financial Times’ are trademarks of The Financial Times Ltd.