Economists More Upbeat About Job Growth, Housing

Housing and job growthA new survey shows economists are growing slightly more optimistic about recovery in the job and housing markets but expect other pillars of the economy to remain weak.

The National Association for Business Economists says in a report issued Monday that its forecasters expect modest growth for the remainder of the year, with the pace picking up in 2013.

Still, the 54 economists NABE surveyed expect consumer spending, business investment and gross domestic product to remain below historic norms.

The quarterly survey compiles expectations for indicators such as hiring, home construction and spending from economists at industry groups, government agencies, banks and consultancies.

The panel now expects average monthly job growth for 2012 of 188,000, up from its forecast in February for 170,000 new jobs per month in 2012. The improved outlook would lead the unemployment rate to fall to 8% by the end of the year, the economists said. The rate is now 8.1%. By the end of 2013, the unemployment rate is expected to ease further to 7.5%.

The NABE economists expect housing starts to rise 18% to 720,000 units this year and increase again to 850,000 in 2013. Residential investment is forecast to increase 8.8% this year; that's better than the 6.6% the economists predicted in February. In 2013, they now expect a 10.4% rise, up from 10%.

The outlook for light vehicle sales is also brighter, and the NABE panel now expects sales to reach 14.5 million units this year, up from their previous forecast for 14 million units. In 2013, they now expect 14.8 million light vehicles to sell, up from a forecast for 14.6 million.

On a broader level, however, the panel's forecast remains relatively bleak.

GDP, which reflects the economy's total output of goods and services, is predicted to grow just 2.4% this year, which is shy of the roughly 2.5% growth forecast by the Federal Reserve. For 2013, the panel of NABE economists expects the GDP to grow 2.8%.

Panelists also say consumer spending will grow 2.2% this year and 2.5% in 2013, below the historic average rate of 2.8%.

After-tax corporate profits are projected to rise 5% this year and 6.3% next year. The NABE economists earlier forecast 6.3% growth in 2012 and 7% in 2013. The annual average over the past 20 years is 10.2%.

NABE's panel now expects real spending on nonresidential structures to grow 2.9%, down from the 4.2% they forecast in February.

The panel revised its projection for industrial production upward to 4.1% in 2012. Panelists still expect labor productivity growth to pick up from last year's rate of 0.4%, rising to 1% in 2012 and to 1.4% in 2013.

And they expect a trade deficit of $562 billion this year, up from $535 billion. For 2013, they expect a deficit of $569 billion, up from $525 billion.

The economists expect the federal budget deficit, meanwhile, to hit nearly $1.2 trillion this year but to fall to $900 next year, with reductions in government spending. Combined federal, state and local government spending is expected to contract by 1.3% in 2012 and 0.4% in 2013.

The NABE surveyed its 54 panelists April 19 to May 2.

On Wednesday, the Department of Commerce is to release data on new home sales in April. And on Thursday the Labor Department releases data on weekly jobless claims and the Commerce Department reports on demand for durable goods, while Freddie Mac, the mortgage buyer releases weekly mortgage rates.

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gosh I forgot the "green shoots of recovery" and "recovery summer"

May 23 2012 at 6:26 AM Report abuse rate up rate down Reply

liberal media and economist are upbeat,, americans save, cut expenses and plant gardens. Good quote,"light vehicle sales are up" code for small cars, average age of us fleet is at 11 years, cars are just plain worn out.

May 23 2012 at 6:25 AM Report abuse rate up rate down Reply

Obama campaign statement in 2008 "I will cut the national debt in half (down to 4.5 trillion) during my first time in office...
FACT: National debt now stands at 15.7 11.2 trillion miss by the president who has no idea how to run a lemonade stand let alone the country. What a joke this amateur is

May 22 2012 at 9:22 AM Report abuse +3 rate up rate down Reply
1 reply to jeviga's comment

Recall that Reagan pledged to balance the budget by the end of his first term. Not only did he miss that mark, but the national debt tripled by the end of his second term. Neither party seems capable of controlling our taste for living beyond our means.

May 22 2012 at 9:38 AM Report abuse -3 rate up rate down Reply

All in all, people elect the representation they deserve. I dont deserve this Occupant.

OMG = Obama Must Go

May 22 2012 at 8:52 AM Report abuse +4 rate up rate down Reply

The economy is much better than it was 4 years ago when Bush's big recession started .
Obama got us out of the recession with the stimulus , but the recovery wasn't strong enough.
Unemployment has come down from 10% to 8% .

May 22 2012 at 2:14 AM Report abuse -5 rate up rate down Reply

It doesn't take a Brain Surgeon to forecast where the Obama Economic ship of state is heading, its right in front of our lying eyes everyday with a new European Country heading towards bankruptcy almost every day as a result of socialistic promises (entitlements) that cannot be met. The entitlement funding money has run out, but of course it can't happen here, because we print money (borrow from China) when we exhaust the bank roll. The bottom line is all socialistic economies will fail because the money runs out from the people paying for other people’s entitlements, a very simple deduction. Of course in the near future we will reach the socialistic nirvana goal of equality; everyone will be at the same state of poverty standing in Soup Kitchen lines for our daily handout of food.

May 22 2012 at 12:05 AM Report abuse +1 rate up rate down Reply

Are these the same economists that predicted the "Summer of recovery" two years ago?

May 21 2012 at 10:48 PM Report abuse +5 rate up rate down Reply

More B__l S__T to bolster Wall Street and Big Oil. Start telling the truth.

May 21 2012 at 9:07 PM Report abuse +2 rate up rate down Reply

More untrue spin for the Nov elections

May 21 2012 at 8:42 PM Report abuse +2 rate up rate down Reply

Arianna is quite sensitive tonight and is deleting comments unless they're in favor of her hero Obama.

May 21 2012 at 8:21 PM Report abuse +6 rate up rate down Reply