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  • recession2014 recession2014 Jan 21, 2014 12:52 AM Flag

    Roubini: U.S. economy will disappoint in 2014

    Roubini: U.S. economy will disappoint in 2014
    Nouriel Roubini, the economist famous for predicting the financial crisis, says it is unlikely wages will pick up in 2014.
    Nouriel Roubini
    Nouriel Roubini
    FORTUNE -- Dr. Doom is back, sort of.
    Nouriel Roubini, the New York University economist who is famous for having predicted the housing bust and financial crisis, said on Friday that 2014 will be another disappointing year for the U.S. economy. Roubini is actually a bit more optimistic about the U.S. than he has been in previous years. But as the outlook has improved, and the stagnation in Washington has lessened a bit, other economists have upped their economic prognoses.
    As a result, Roubini once again thinks the consensus has gotten ahead of itself.
    Instead, the NYU economist says growth will pick up, but not enough to produce raises for average American workers. That will limit Americans' ability to shop and pay down debt, two things the economy needs for sustained growth. At the same time, corporate earnings are slowing. And while stocks aren't in a bubble, Roubini says they now look expensive. What's more, he says the U.S. may not get as much of a boost from its growing energy supply in 2014 as many think.
    "The question is whether we have gotten to sustainable growth that is not based on bubbles," says Roubini. "Not yet."

    Roubini made his comments at a breakfast event hosted on Friday by Time Inc. The conversation, which also included the Eurasia Group's Ian Bremmer, was moderated by Time's Rana Foroohar (who had her own take on the discussion).
    Bremmer agreed that economists have gotten ahead of themselves. But he says the main risks in 2014 will be political, not economic. His biggest concern is that the Obama Administration's foreign policy agenda appears to be less ambitious in the president's second term. And he says the revelations from Edward Snowden have hurt the U.S. overseas.

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