Economists See Solid U.S. Growth

 

The economists surveyed expect the unemployment rate to fall from 9.9 percent in April to 9.4 percent at the end of this year and to 8.5 percent by the end of 2011. The economy in April added jobs at the fastest pace in four years, with strong employment gains in the private sector. Article: The U.S. economy should expand at a solid pace this year and next as consumers increase spending, confident the recession is behind them, according to a panel of economists.

The 46 economists surveyed in the National Association for Business Economics report between April 27 and May 7 predicted U.S. gross domestic product would expand by 3.2 percent in 2010 and 2011.

That is a touch higher than the 3.1 percent growth predicted for both years in the last survey, released Feb. 10.

“Although risks involving Europe have recently escalated, the outlook in this country has improved in most respects,” said NABE President Lynn Reaser. “Growth prospects are stronger, unemployment and inflation are lower, and worries relating to consumer retrenchment and domestic financial headwinds have diminished.”

Stung by the worst recession since the 1930s, Americans were thriftier in 2009. But consumer spending, which accounts for more than two-thirds of U.S. GDP, drove the economy's growth in the first quarter of 2010. That should help compensate for fading support from the government later this year.

The U.S. savings rate should average 3.4 percent this year, the economists predicted, down from a 4.6 percent forecast three months ago.

Spending will be helped by a gradually improving labor market. Employment gains are expected to remain robust through 2011, except for a slowdown in job creation in the July-September period, when those working on the 2010 decennial Census count will lose their temporary jobs.

– Courtesy of Wall Street Journal