Global| May 24 2010National Association For Business Economics Expects Positive Growth, Low Inflation & Higher Interest Rates
by:Tom Moeller
|in:Economy in Brief
Summary
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% [...]
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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 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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