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Economy in Brief

NABE  Expectations For Economic Growth Are Little Changed
by Tom Moeller   November 22, 2010

In the latest report, the National Association for Business Economics indicates that moderate U.S. economic growth will continue through next year. Expectations for 2.6% growth are unchanged from the previous forecast. Continuing to underpin the expansion is moderate growth in consumer spending where expectations for 2.4% growth are slightly higher than forecast last month. Also slightly higher are expectations for growth in producers' durable equipment investment. 

Expected improvements in housing starts and light vehicle sales have been ratcheted down slightly and levels should remain well below their pre-recession peaks. Also, gains in payroll employment have been lessened slightly as was the decline in the unemployment rate, now remaining near the current level. The moderate nature of the recovery is expected to exert the same, modest upward pressure on consumer prices. Interest rates, however, should rise less than expected last month.

Improved economic growth is projected to generate positive growth in corporate profitability. However, the 7% growth rate was revised down and is barely one-quarter the 2010 rate. Moderate growth also is expected to do little to reduce the federal government budget deficit, still at $1.1 trillion next year.

The figures from the latest NABE report can be found in Haver's SURVEYS database.

National Association For Business Economics 2011 2010 2009 2008 2007
Real GDP (% Chg. SAAR) 2.6 2.7 -2.6 0.0 2.0
  Personal Consumption Expenditures 2.4 1.7 -1.2 -0.3 2.4
  Nonresidential Structures 1.8 -13.2 -20.4 5.9 14.1
  Producers' Durable Equipment & Software 10.8 14.9 -15.3 -2.4 3.7
  Residential Investment 5.0 -3.2 -22.9 -24.0 -18.7
  Change in Real Business Inventories (Bil. $) 54.8 73.3 -113.1 -37.6 27.7
  Real Net Exports (Bil. $) -466.3 -444.3 -363.0 -504.1 -654.9
Housing Starts (Mil. Units) 0.72 0.60 0.55 0.91 1.36
Light Vehicle Sales (Mil. Units) 12.6 11.4 10.4 13.2 16.1
Payroll Employment Avg. Monthly Change (000s) 136 68 -395 -302 90
Unemployment Rate (%) 9.4 9.7 9.3 5.8 4.6
Consumer Price Index (Y/Y %) 1.5 1.6 -0.4 3.9 2.9
Fed Funds Rate (%) 0.18 0.13 0.13 0.13 4.25
10-Year Treasury Note (%, Year End) 3.25 2.58 3.85 2.25 4.04
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