A new report from the National Association for Business Economics (NABE) predicts growth for the US economy this year and throughout 2012.
The February 2011 NABE Outlook, released last week, presents the consensus of a panel of 47 professional economic forecasters, who were surveyed January 25 February 9. (Keep in mind, this was just as oil prices were beginning to climb.)
Here is a summary from the latest report:
The NABE Outlook forecasts economic growth in 2011 and 2012. Real gross domestic product (GDP) is expected to advance 3.3 percent (year over year) in 2011, up from the panel's November prediction of 2.6 percent. The panel expects growth in 2012 to edge up to 3.4 percent (year over year)a pace somewhat above most estimates of the economy's long-run growth potential, but still consistent with the moderate pace of growth that typically occurs in recoveries from severe financial crises. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 is expected to contribute 0.5 percentage point to growth in 2011 and 0.1 percentage point in 2012.
The latest NABE forecast reflects greater confidence that financial headwinds will gradually begin to subside. Almost 40 percent of survey respondents think the recovery will continue at a moderate pace, with output growth close to or slightly above potential. One third of the respondents are more optimistic, feeling that the economy will overcome its headwinds and behave more in line with a traditional business-cycle expansion. Only 11 percent of respondents characterize the expansion as "subpar with severe wealth losses and onerous debt burdens inhibiting spending and lending," down from the 40 percent of panelists who held this view in November. The likelihood of either stagflation or the economy slipping back into recession continues to be viewed as relatively low, although 10 percent of respondents think that the recovery will be uneven and dependent on stimulus policies.
Labor market conditions will continue to improve at a moderate pace. Monthly payroll gains are forecast to average 178,300 this year, but to rise throughout the year, reaching 210,000 per month in the final quarter of 2011. Employment gains will edge a bit higher in 2012, rising 215,500 per month. The outlook panel expects joblessness to remain high, with the unemployment rate averaging 9.3 percent in the first quarter of this year and edging down to 9.0 percent in the fourth quarter of 2011. The unemployment rate is then anticipated to decline to a still-high 8.2 percent in the final quarter of 2012.
Could rising oil prices derail the economic recovery? Federal Reserve Bank of Richmond President Jeffrey Lacker doesn't think so. Speaking at the US Monetary Policy Forum last week, he said oil price increases are a "manageable" risk, so far.