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JP Morgan: "New normal" is sub-par

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JP Morgan: "New normal" is sub-par

JPMorgan Sub-New Normal Growth Seen Vexing Next Fed Chief

The next chairman of the Federal Reserve faces an alarming possibility: the new normal for the economy is even worse than advertised.

The long-run potential growth rate for gross domestic product has slid to around 1 3/4 percent per year, from an average rise in GDP of 2 1/2 percent since 1990, according to economists at JPMorgan Chase & Co., the largest U.S. bank by assets. That would be the lowest level since World War II and below the 2 percent mark that Pacific Investment Management Co. pegged as the new normal for the economy.

The “U.S. future isn’t what it used to be,” said Michael Feroli, chief U.S. economist at JPMorgan in New York. Declining productivity gains and a slower expansion of the labor force “should limit the U.S. average growth pace” in the long run.

As they gather for the Fed’s annual conference at Jackson Hole, Wyoming, economists and central bankers are aware of the implications. A slower potential growth rate -- the top speed at which the economy can expand without heating up inflation -- means the Fed would have to tighten credit quicker if growth does gain momentum. Slower growth would limit the ability of businesses to boost profits and workers to win pay increases and make it tougher to reduce the federal budget deficit.

“It’s hard to be optimistic,” said Edmund Phelps, a professor at Columbia University in New York and winner of the Nobel Prize in Economic Sciences in 2006. “There’s less innovation and less stimulation going on.”

Bernanke Outlook

Fed Chairman Ben S. Bernanke said in November that the financial crisis and its aftermath had probably “reduced the potential growth rate” of the economy, as discouraged workers dropped out of the labor force and businesses held back on investment.

He voiced hope though that those drags on growth wouldn’t last long. “The effects of the crisis on potential output should fade as the economy continues to heal,” Bernanke, who isn’t attending the Jackson Hole meeting, said in a Nov. 20 speech in New York.

Lawrence Summers, whom President Barack Obama has mentioned as a candidate to succeed Bernanke, told a Drobny Global Advisors conference in April that he expected the economy to gain momentum in the coming 18 months. If that failed to happen, however, it would suggest that potential growth is lower and more in line with the economy’s sub-par performance in recent years, he said, according to a transcript of his remarks.

Since the recession ended in June 2009, the U.S. has grown at an average annual rate of 2.2 percent. GDP in the second quarter rose at a 1.7 percent pace, according to a preliminary estimate by the Commerce Department.

Fed Forecast

The Fed’s 19 policy makers peg the longer-run growth rate of the economy at anywhere from 2 to 3 percent, data released by the Fed on June 19 showed. The central tendency estimate, which excludes the three highest and lowest projections by the policy makers, was 2.3 percent to 2.5 percent.

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Mr. Midmarket CIO is always on the lookout for content that helps educate his fellow IT executives. Gartner, in particular, offers some of the best webinars in the business to help you achieve IT success in 2013. Here are a few you should attend scheduled for September, so sign up for them and enjoy.

 

Monday, Sept. 9, 11 a.m. EST

I&O Maturity: What It Takes to Be in the Top 10% 

Presented by Jeffrey Brooks, Research Director, Gartner

IT operations teams are continually looking for ways to improve their operational efficiency. Improving I&O maturity is not something that large enterprises need to consider. Achieving “above average” I&O maturity can ensure that midmarket IT departments are not positioned as cost centers, but instead are considered tools for growing and transforming the business. 

In this webinar, you will learn:

  • The first steps midsize enterprises should take in addressing I&O maturity improvement
  • Hallmarks of an organization in the top 10% of I&O maturity
  • What the Gartner ITScore for I&O is, and how it can be used to understand maturity

 

Monday, Sept. 9, 2 p.m. EST

Best Practices in Implementing a Pace-Layered Application Strategy 

Presented by Dennis Gaughan, Managing VP, Gartner

Leading midsize organizations recognize that a “one size fits all” application strategy doesn’t work. This session discusses lessons learned by organizations that have adopted the Gartner Pace-Layered Application Strategy for greater agility.

In this webinar, you will learn:

  • How midsize organizations are adopting pace layers and their emerging best practices
  • Challenges associated with implementing a Pace-Layered Application Strategy
- See more at: http://www.xchange-events.com/newsletter-articles/gartner-offers-complimentary-webinars-to-achieve-it-success-in-20131/#sthash.CJso7cSY.dpuf

Mr. Midmarket CIO is always on the lookout for content that helps educate his fellow IT executives. Gartner, in particular, offers some of the best webinars in the business to help you achieve IT success in 2013. Here are a few you should attend scheduled for September, so sign up for them and enjoy.

 

Monday, Sept. 9, 11 a.m. EST

I&O Maturity: What It Takes to Be in the Top 10% 

Presented by Jeffrey Brooks, Research Director, Gartner

IT operations teams are continually looking for ways to improve their operational efficiency. Improving I&O maturity is not something that large enterprises need to consider. Achieving “above average” I&O maturity can ensure that midmarket IT departments are not positioned as cost centers, but instead are considered tools for growing and transforming the business. 

In this webinar, you will learn:

  • The first steps midsize enterprises should take in addressing I&O maturity improvement
  • Hallmarks of an organization in the top 10% of I&O maturity
  • What the Gartner ITScore for I&O is, and how it can be used to understand maturity

 

Monday, Sept. 9, 2 p.m. EST

Best Practices in Implementing a Pace-Layered Application Strategy 

Presented by Dennis Gaughan, Managing VP, Gartner

Leading midsize organizations recognize that a “one size fits all” application strategy doesn’t work. This session discusses lessons learned by organizations that have adopted the Gartner Pace-Layered Application Strategy for greater agility.

In this webinar, you will learn:

  • How midsize organizations are adopting pace layers and their emerging best practices
  • Challenges associated with implementing a Pace-Layered Application Strategy
- See more at: http://www.xchange-events.com/newsletter-articles/gartner-offers-complimentary-webinars-to-achieve-it-success-in-20131/#sthash.CJso7cSY.dpuf

Mr. Midmarket CIO is always on the lookout for content that helps educate his fellow IT executives. Gartner, in particular, offers some of the best webinars in the business to help you achieve IT success in 2013. Here are a few you should attend scheduled for September, so sign up for them and enjoy.

 

Monday, Sept. 9, 11 a.m. EST

I&O Maturity: What It Takes to Be in the Top 10% 

Presented by Jeffrey Brooks, Research Director, Gartner

IT operations teams are continually looking for ways to improve their operational efficiency. Improving I&O maturity is not something that large enterprises need to consider. Achieving “above average” I&O maturity can ensure that midmarket IT departments are not positioned as cost centers, but instead are considered tools for growing and transforming the business. 

In this webinar, you will learn:

  • The first steps midsize enterprises should take in addressing I&O maturity improvement
  • Hallmarks of an organization in the top 10% of I&O maturity
  • What the Gartner ITScore for I&O is, and how it can be used to understand maturity

 

Monday, Sept. 9, 2 p.m. EST

Best Practices in Implementing a Pace-Layered Application Strategy 

Presented by Dennis Gaughan, Managing VP, Gartner

Leading midsize organizations recognize that a “one size fits all” application strategy doesn’t work. This session discusses lessons learned by organizations that have adopted the Gartner Pace-Layered Application Strategy for greater agility.

In this webinar, you will learn:

  • How midsize organizations are adopting pace layers and their emerging best practices
  • Challenges associated with implementing a Pace-Layered Application Strategy

 

 

- See more at: http://www.xchange-events.com/newsletter-articles/gartner-offers-complimentary-webinars-to-achieve-it-success-in-20131/#sthash.CJso7cSY.dpuf

Mr. Midmarket CIO is always on the lookout for content that helps educate his fellow IT executives. Gartner, in particular, offers some of the best webinars in the business to help you achieve IT success in 2013. Here are a few you should attend scheduled for September, so sign up for them and enjoy.

 

Monday, Sept. 9, 11 a.m. EST

I&O Maturity: What It Takes to Be in the Top 10% 

Presented by Jeffrey Brooks, Research Director, Gartner

IT operations teams are continually looking for ways to improve their operational efficiency. Improving I&O maturity is not something that large enterprises need to consider. Achieving “above average” I&O maturity can ensure that midmarket IT departments are not positioned as cost centers, but instead are considered tools for growing and transforming the business. 

In this webinar, you will learn:

  • The first steps midsize enterprises should take in addressing I&O maturity improvement
  • Hallmarks of an organization in the top 10% of I&O maturity
  • What the Gartner ITScore for I&O is, and how it can be used to understand maturity

 

Monday, Sept. 9, 2 p.m. EST

Best Practices in Implementing a Pace-Layered Application Strategy 

Presented by Dennis Gaughan, Managing VP, Gartner

Leading midsize organizations recognize that a “one size fits all” application strategy doesn’t work. This session discusses lessons learned by organizations that have adopted the Gartner Pace-Layered Application Strategy for greater agility.

In this webinar, you will learn:

  • How midsize organizations are adopting pace layers and their emerging best practices
  • Challenges associated with implementing a Pace-Layered Application Strategy

 

 

- See more at: http://www.xchange-events.com/newsletter-articles/gartner-offers-complimentary-webinars-to-achieve-it-success-in-20131/#sthash.CJso7cSY.dpuf

Mr. Midmarket CIO is always on the lookout for content that helps educate his fellow IT executives. Gartner, in particular, offers some of the best webinars in the business to help you achieve IT success in 2013. Here are a few you should attend scheduled for September, so sign up for them and enjoy.

 

Monday, Sept. 9, 11 a.m. EST

I&O Maturity: What It Takes to Be in the Top 10% 

Presented by Jeffrey Brooks, Research Director, Gartner

IT operations teams are continually looking for ways to improve their operational efficiency. Improving I&O maturity is not something that large enterprises need to consider. Achieving “above average” I&O maturity can ensure that midmarket IT departments are not positioned as cost centers, but instead are considered tools for growing and transforming the business. 

In this webinar, you will learn:

  • The first steps midsize enterprises should take in addressing I&O maturity improvement
  • Hallmarks of an organization in the top 10% of I&O maturity
  • What the Gartner ITScore for I&O is, and how it can be used to understand maturity

 

Monday, Sept. 9, 2 p.m. EST

Best Practices in Implementing a Pace-Layered Application Strategy 

Presented by Dennis Gaughan, Managing VP, Gartner

Leading midsize organizations recognize that a “one size fits all” application strategy doesn’t work. This session discusses lessons learned by organizations that have adopted the Gartner Pace-Layered Application Strategy for greater agility.

In this webinar, you will learn:

  • How midsize organizations are adopting pace layers and their emerging best practices
  • Challenges associated with implementing a Pace-Layered Application Strategy

 

 

- See more at: http://www.xchange-events.com/newsletter-articles/gartner-offers-complimentary-webinars-to-achieve-it-success-in-20131/#sthash.CJso7cSY.dpuf
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