Economists More Optimistic on U.S. Growth, Worried About High Unemployment

Economists are forecasting faster growth than they were in November, according to a quarterly survey from the National Association for Business Economics.

Although economists say the U.S. economy will continue to expand through next year, boosted by rising consumer and business spending, joblessness is expected to remain high and the pace of the housing recovery will be sluggish.

The 47 economists polled in the survey expect the economy to grow 3.3 percent this year. That's up from November's prediction of 2.6 percent growth. It's also higher than last year's 2.9 percent growth rate. The faster growth will be driven by pent-up demand from consumers ready to spend again, strong growth in Asia and business spending on new equipment and software.

Economists are "concerned about high levels of government deficits and debt, excessive unemployment, and rising commodity prices," the president of the association, Richard Wobbekind, said in a statement. Wobbekind is associate dean of the Leeds School of Business at the University of Colorado.

For 2012, the panel expects the economy to grow 3.4 percent from 2011. This is "consistent with the moderate pace of growth" that usually takes place during recoveries from severe financial crises such as the meltdown that led to the Great Recession, the report said.

Nearly 40 percent of the survey's respondents think that the recovery will continue to grow moderately, while one third believe expansion will be more robust. Only 11 percent - or about five of the respondents - expect the growth to be "subpar." That's down sharply from the 40 percent who thought this in November.

The labor market is improving slowly. On average, employers are expected to add 178,300 jobs per month this year. The economists predict that 210,000 jobs will be added to payrolls in each of the last three months of 2011.

At the same time, unemployment will stay high, with the rate averaging 9.3 percent in the first quarter of this year and inching slightly lower to 9 percent in the fourth. By the last quarter of 2012, the joblessness rate will still be high - 8.2 percent. In January, the unemployment rate was 9 percent.

The outlook for consumer spending has improved, and is expected to grow 3.2 percent this year. That's up from a 2.4 percent growth forecast in November. In 2012, spending is expected to rise by 2.9 percent, which is the same as the annual growth rate over the past 20 years.

The NABE panelists see business spending as a bright spot in 2011 and 2012, with double-digit percentage growth in spending on equipment and software. But spending on structures remains weak, expected to grow just 1.4 percent in 2011. By next year, however, this is expected to grow by 4.8 percent.

In 2011, the panel expects the federal deficit to reach $1.4 trillion, up from the earlier forecast of $1.1 trillion. The panelists see the federal debt as "their single greatest concern going forward, even exceeding worries about high unemployment, and far greater than concerns about either inflation or deflation," the report said.

The housing market is expected to stay tepid, with most panelists expecting home prices to bump along "at a cyclical low," the survey found.

The survey was conducted between Jan. 25 and Feb. 9.

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11 Comments

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scottee

we will have high unemployment as long as we have a trillion dollar national debt.

March 01 2011 at 7:38 AM Report abuse rate up rate down Reply
martinsportraits

Complete Nonsense! .....I'm sure you understand the agenda behind the assault of all this feel good propaganda!

February 28 2011 at 5:10 PM Report abuse rate up rate down Reply
martinsportraits

ABSOLUTE NONSENSE .......The US economy is on the skids and everyone knows it .....and here comes inflation!

February 28 2011 at 12:24 PM Report abuse +3 rate up rate down Reply
1 reply to martinsportraits's comment
Tommy Ray White

Bit of a history lesson for yourself and right-wing goons like you. Even Conservative economists admit that Obama inherited the worse economy since the Great Depression. Clinton handed the first Federal Surplus in 45 years to your hero George W. Bush. Bush turned this into the largest Federal Deficit in American History--breaking the record of his Papa, GHWBush and Ronny Reagan. Are you lucid enough to believe that the largest 3 DEFICITS IN AMERICAN HISTORY AT END OF PRESIDENCIES ARE ALL OWNED BY REPUBLICAN PRESIDENTS???
Don't trust me, research it. And shut the hell up, you REPUG HACK!!!

February 28 2011 at 8:13 PM Report abuse rate up rate down Reply
cpo1514

Is this another George Soros article to boost Barry's ratings?????

February 28 2011 at 10:32 AM Report abuse +5 rate up rate down Reply
JASON&LIZ4EVER

Last quarter gdp 3.3 now they tell us 2.8% With the chaos in Libya oil spikes, but dont worry the Saudis are here to save us all. DO YOU BELIEVE ANY OF THIS? If you do how long before the mideast fire spreads to Saudi Arabia.

February 28 2011 at 10:22 AM Report abuse +7 rate up rate down Reply
Kenneth

Until government does something about oil in this country to get the price down their will be slow growth. Open up drilling and start using US oil supplies to fuel this country reducing the amount of foreign oil we buy.

February 28 2011 at 9:53 AM Report abuse +7 rate up rate down Reply
1 reply to Kenneth's comment
cpo1514

Seems to me that there is no law to suspend the drilling. Ohmama didn't pass a law did he?? Also as the appointments of political positions don't require any approvals and the health care was legally voted out we may as well just take the lOrganizers lead and ignore what is not liked. So... start the drilling and let the federal lawsuits start.... hasnt stopped the Organizer to date..

February 28 2011 at 10:37 AM Report abuse +3 rate up rate down Reply
marine1942

This poll was taken on economists. Do you mean the FED, or Dept of Labor, or the banks that Obama gave money to ?

February 28 2011 at 8:41 AM Report abuse +6 rate up rate down Reply
1 reply to marine1942's comment
cpo1514

Never saw a copy of the poll questions.... maybe just a Huffington puff piece... you know weigh the pool with 60% libs and appointees and a few Socialists....

February 28 2011 at 10:41 AM Report abuse +4 rate up rate down Reply