Economists bump up some forecasts as optimism rises
Economists are increasingly confident that some pillars of the U.S. economy will improve this year, though they remain cautious when it comes to the overall pace of economic growth. The National Association for Business Economics announced today forecasters have raised their expectations for employment, new home construction and business spending this year. But they held on to their average prediction that America's gross domestic product will grow at a rate of 2.4%. That's an improvement from 2011, when economists believe the economy grew 1.6%. Final economic growth numbers for 2011 are due out Wednesday. The NABE Outlook Panel of 45 economists was surveyed between Jan. 26 and Feb. 8. The economists forecast unemployment will remain at 8.3% this year, which is lower than the 8.9% forecast from November. The economists expect job growth to accelerate next year, and forecast the unemployment rate will fall to 7.8% in 2013. GDP growth needs to be above 3% to significantly lower unemployment. Other 2012 forecasts from the most recent NABE economic survey include:
• Builders will break ground on 700,000 homes this year, up 15% compared with 2011.
• Business spending will increase by 8.1%, including 3.5% growth in the industrial sector.
• Spending will increase just 2.1%, which is well below the historical average of 2.8%.
• Exports will grow by 4.6%, down from a November prediction of 6.1%.
• Imports will grow by 4.3%, also down from the November forecast of 4.3% growth.
Today's poll question: Are you more optimistic about the nation's economy today than you were last fall?
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