Recent Updates

  • New Zealand: Performance of Service Index, Composite PMI (Nov)
  • Iran: Monetary & Credit Aggregates (Oct)
  • Israel: Job Vacancy Survey (Nov)
  • China: 70-City Property Prices (Nov)
  • Serbia: Labor Cost Index (Q3); CPI (NOV)
  • Czech Republic: Mortgage Loans (Q3)
  • more updates...

Economy in Brief

National Association For Business Economics Expects Positive Growth, Low Inflation & Higher Interest Rates
by Tom Moeller May 24, 2010

>

The National Association For Business Economics (NABE) indicated in its latest survey of 46 economists that economic growth would continue this year and next at a 3.2% rate. Though that expectation is slightly higher than the 3.1% growth forecasted in the February survey, it remains well short of the four-to-seven percent growth following past severe recessions.

Improved, but still subpar, growth in consumer spending is expected to bolster the economic recovery. Growth of 2.6% and 2.8% compares to the five percent growth after prior recessions.

Capital spending also is expected to improve -- and with more momentum -- than the consumer's rebound. The 11% gains in equipment spending this year and next are just shy of the higher double-digit gains following earlier recessions. The recovery in residential investment, while respectable at 12.6% in 2011, follows subpar growth this year and compares to the up to 41% gains after earlier, severe downturns.

As a result of the economic rebound, the unemployment rate is expected to fall. Here again, however, the half a percentage point decline is much smaller than the one-to-three point drops after earlier recessions. That implied level of continued economic slack is expected to leave core consumer price inflation roughly stable near 1.5%. Overall inflation remains relatively higher at 2.0% due to higher oil prices which is expected to average $88.80 per barrel of crude next year while interest rates rise modestly with the economic recovery.

Nat'l Assn. For Business Economics Outlook 2011 2010 2009
Real GDP (%) 3.2 3.2 -2.4
  Personal Consumption Expenditures 2.8 2.6 -0.6
  Capital Spending - Structures -1.1 -12.6 -19.7
  Capital Spending - Equipment & Software 11.0 10.7 -16.9
  Residential Investment 12.6 1.9 -20.4
Unemployment Rate 9.0 9.6 9.3
CPI 2.0 2.0 -0.3
  Price Index - PCE Less Food & Energy 1.7 1.3 1.4
10-Year Treasury Note 4.70 4.20 3.85
close
large image