The pace of the U.S. economic recovery will remain steady but slow, according to economists in two separate reports just released. The pace is blamed on concerns over high levels of federal debt, high unemployment and rising commodity prices persist.
The National Association for Business Economics survey found economists now expect growth of 2.7 percent this year, up slightly from the previous forecast of 2.6 percent, according to findings released on Nov. 22. For 2011, the group still expects an economic expansion of 2.6 percent.
The NABE Outlook survey (www.nabe.com), conducted Oct. 21 to Nov. 4, queried 51 professional economists to gather a consensus of macroeconomic forecasts.
The majority of economists noted the chances of a recession relapse are low, but high unemployment, debt and severe loss of wealth are expected to hamper a more robust rebound, according to the survey.
The Conference Board reported similar findings. While the Leading Economic Index growth has been slow this year, it remains on an upward trend, suggesting modest economic expansion in the near term, according to the group, which released its findings on Nov. 18.
The Index posted a 0.5 percent increase to 111.3 in October, following a 0.5 percent increase in September, and a 0.1 percent increase in August.
“The economy is slow, but latest data on the U.S. (Leading Economic Index) suggest that change may be around the corner,” said Ken Goldstein, an economist at The Conference Board (www.conference-board.org), in a statement. “Expect modest holiday sales, driven by steep discounting. But following a post-holiday lull, the indicators are suggesting a mild pickup this spring.”
NABE members said they expect consumer spending to also remain modest, with this year's holiday retail sales expected to rise just 2.5 percent from last year.
Labor market conditions will improve slowly. Monthly payroll gains are forecast to average less than 150,000 until the latter half of 2011, at which time gains will improve at a range of roughly 150,000 to 170,000.
Joblessness will remain high, with the unemployment rate continuing at 9.5 percent or higher through the first quarter of 2011 before easing slightly to 9.2 percent by the end of 2011 -- marking the weakest post-recession job recovery on record, the NABE said.
Business spending is expected to have sustained, double-digit growth projected through the end of next year, NABE respondents said. Spending on structures is now expected to grow 1.8 percent in 2011 -- updated from an earlier prediction of a 0.2 percent contraction.