By MARY PATRICK
A recent survey found that economists are keeping a positive outlook on the United States economy, predicting 3% growth by the second quarter of 2014.
The numbers come from the National Association of Business Economics (NABE), which surveyed 43 of the nation’s top economists from Aug. 8-20.
The economy has not grown by 3 percent since 2005.
The survey is good news for those considering entering business school or who are currently getting an education. The increase in economic growth could translate into a larger number of jobs available.
Nayantara Hensel, one of the survey’s authors and an economist at the National Defense University, told the Wall Street Journal the labor market should steadily improve and inflation remain low.
The economists projected that unemployment would drop to 7% in 2014, down from the current rate of 7.5%. They expect the economy to add about 199,000 new jobs every month.
“There will be gradual acceleration of economic expansion,” said Hensel. “It’s getting better, but it’s getting better slowly.”
While the outlook is positive, the numbers in the NABE study were reduced since the last survey in May. In that survey, economists predicted slightly more robust growth in real gross domestic product. The forecast reductions were primarily in the areas of consumer spending, industrial production and private investment in “nonresidential structures, equipment and software.”
“It’s fair to assume that they reduced their outlook for GDP because they had seen weaker business investment across the board,” Ken Simonson, chief economist of the Associated General Contractors of America and an NABE analyst who helped compile the report, told USA Today.
“The big takeaway is that the forecast now, like in May, is for gradually improving conditions, getting up to … growth of 3% in 2014 and holding there.”
The economists surveyed for the NABE report also projected the housing market would continue to grow, something that will help bolster the overall economy. Home prices will increase about 6% over the course of 2013, the economists projected, and continue to grow at a somewhat smaller rate – 4.8% – in 2014, according to the economists’ projections.
In addition to predicting economic growth, the economists also projected an 80% likelihood that continued growth will mean the Federal Reserve will cut back on its monthly $85 billion purchases of mortgage bonds and Treasury bills – designed to stimulate the economy and keep interest rates low – sometime in 2014. They also said there is a 45% likelihood the cutbacks will start this year.
