US economists lower growth expectations
By Christina Rexrode |
May 17, 2011, Tuesday
|
Print Edition
Print Edition
ECONOMISTS are dialing back their expectations of economic growth in the United States this year.
A survey by the National Association for Business Economics predicts GDP will grow 2.8 percent this year - down from February's prediction of 3.3 percent.
The outlook for consumer spending and the housing market also weakened, in part because oil prices are expected to remain above US$100 a barrel.
In the survey, a panel of 41 economists said they "remain highly concerned" about the growing federal deficit, and said growth in the first three months of the year was weaker than expected.
The economists' predictions reflect the jitteriness of a public still recovering from the financial crisis and now getting squeezed by rising prices for gas, groceries and other household items.
Retailers are paying more for the raw materials they need to make and transport their products, and say they have no choice but to pass the increases on to customers.
The NABE's outlook survey is released every quarter. For this report, the poll was conducted from April 13 to May 1. For the previous report, the economists were polled between January 25 and February 9.
Unrest in parts of the Middle East and North Africa since then has played a role in the higher prices for raw materials and gas.
The economists said they expect GDP to grow at 2.8 percent this year - down from their previous 3.3 percent prediction. They also lowered predictions for consumer spending growth (2.8 percent, down from 3.2 percent) and housing starts (610,000, down from 660,000). They also expect housing prices to fall 1.5 percent, after saying earlier they would rise 0.4 percent.
However, the economists expect spending on business equipment and software to rise 11.9 percent this year, partly because of pent-up demand after businesses cut back during the recession. And corporate profits will rise by 8.5 percent, they predict.
A survey by the National Association for Business Economics predicts GDP will grow 2.8 percent this year - down from February's prediction of 3.3 percent.
The outlook for consumer spending and the housing market also weakened, in part because oil prices are expected to remain above US$100 a barrel.
In the survey, a panel of 41 economists said they "remain highly concerned" about the growing federal deficit, and said growth in the first three months of the year was weaker than expected.
The economists' predictions reflect the jitteriness of a public still recovering from the financial crisis and now getting squeezed by rising prices for gas, groceries and other household items.
Retailers are paying more for the raw materials they need to make and transport their products, and say they have no choice but to pass the increases on to customers.
The NABE's outlook survey is released every quarter. For this report, the poll was conducted from April 13 to May 1. For the previous report, the economists were polled between January 25 and February 9.
Unrest in parts of the Middle East and North Africa since then has played a role in the higher prices for raw materials and gas.
The economists said they expect GDP to grow at 2.8 percent this year - down from their previous 3.3 percent prediction. They also lowered predictions for consumer spending growth (2.8 percent, down from 3.2 percent) and housing starts (610,000, down from 660,000). They also expect housing prices to fall 1.5 percent, after saying earlier they would rise 0.4 percent.
However, the economists expect spending on business equipment and software to rise 11.9 percent this year, partly because of pent-up demand after businesses cut back during the recession. And corporate profits will rise by 8.5 percent, they predict.
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