Economists Maintain Rosy View for 3% Growth Next Year

shoppers portland oregon economists rosy economic outlook
Rick Bowmer/AP
Business forecasters maintained their rosy view of the U.S. economy in 2014, predicting 3 percent growth by the second quarter of next year, low inflation and improving employment.

The top economists surveyed by the National Association of Business Economics between Aug. 8 and Aug. 20 also said there's an 80 percent likelihood that the pickup in growth will prompt the Federal Reserve to trim its monthly $85 billion purchases of mortgage bonds and Treasury bills next year.

The NABE's 43 respondents said in a report released Monday that there's a 45 percent chance the Fed will begin its so-called "tapering" as early as this year.

But economists trimmed their expectations for the second half of 2013 since the last survey, in May.

The economists predicted that real gross domestic product would grow at a 2.3 percent annualized rate in the third quarter through September, down from 2.5 percent seen earlier; and 2.6 percent in the fourth quarter, down from 2.8 percent seen earlier. They were less optimistic about consumer spending, industrial production and private investment in nonresidential structures, equipment and software.

The economists' slightly more pessimistic views were likely affected by the government initially reporting in July that second-quarter GDP grew 1.7 percent. On Aug. 29, the Commerce Department revised the figure sharply higher for the April-June quarter, to 2.5 percent.

"It's fair to assume that they reduced their outlook for GDP because they had seen weaker business investment across the board," said Ken Simonson, chief economist of the Associated General Contractors of America and an NABE analyst who helped compile the report. "The big takeaway is that the forecast now, like in May, is for gradually improving conditions, getting up to ... growth of 3 percent in 2014 and holding there." The last time the economy grew more than 3 percent over one year, on average, was in 2005.

NABE economists predicted that the consumer price index will grow just 1.3 percent in 2013 and 1.7 percent in 2014 when excluding volatile food and energy prices. The unemployment rate is seen falling to 7 percent next year from 7.5 percent this year, with the economy adding on average 199,000 non-farm jobs a month next year.

The dollar is seen holding steady against the European currency at $1.30 per euro next year, compared to an expected $1.31 in 2013.


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Jasmine Eva

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September 09 2013 at 5:05 PM Report abuse rate up rate down Reply
joey

The ASS PRESS once again B.S.....

September 09 2013 at 3:44 PM Report abuse -4 rate up rate down Reply
createidea

\' Economists Maintain Rosy View for 3% Growth Next Year \'

LOL !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

September 09 2013 at 10:44 AM Report abuse +2 rate up rate down Reply
nedfarn25

what stooge wrote this article? some professor lost in academia or paul communist krugman?

September 09 2013 at 8:50 AM Report abuse -2 rate up rate down Reply
ejschuler1

These so called economists must not know drugs are bad !

September 09 2013 at 8:46 AM Report abuse +1 rate up rate down Reply
r1100rsl2

How about the negative effect of yet another Mideast war?

September 09 2013 at 8:35 AM Report abuse -2 rate up rate down Reply
1 reply to r1100rsl2's comment
coochiescooter

whoops

September 09 2013 at 8:41 AM Report abuse -5 rate up rate down Reply
Bill Ridenour

Hmmmm.....advent of Obamacare creating surge in part time jobs and underemployment, interest rates inching up and threatening to throw the housing and capital goods market back into recession..........labor participation rate (the real indicator of unemployment) at all time highs........

What planet are these economists coming from?

September 09 2013 at 8:32 AM Report abuse -2 rate up rate down Reply
1 reply to Bill Ridenour's comment
coochiescooter

Obicon.

September 09 2013 at 8:34 AM Report abuse -3 rate up rate down Reply
COMMON SENSE

'If you don't read the newspaper you are uninformed!
If you do read the newspaper you are misinformed.'
-Mark Twain

September 09 2013 at 8:15 AM Report abuse +5 rate up rate down Reply
1 reply to COMMON SENSE's comment
coochiescooter

LOL, the same place Obama hears about the news in the world.

September 09 2013 at 8:31 AM Report abuse -3 rate up rate down Reply
FSHNT21

Set the Kool Aid down, turn off MSNBC and get back to reality...
This Country is going down the tubes at a record pace and Obamacare hasn't even been fully implemented...
Nice try with the propaganda here, but the facts say otherwise...

September 09 2013 at 8:02 AM Report abuse -1 rate up rate down Reply
coochiescooter

Speculation ? Whatever.

September 09 2013 at 7:52 AM Report abuse -4 rate up rate down Reply