10/25/2011

GDP growth remaining very slow

Well, given that GDP growth was only 0.8 percent annual rate during the first six months, you would have to get above three percent for the last six months to average 2 percent for the year. The employment growth predictions here are pretty bad. From the WSJ:

A vast majority of businesses predict the U.S. economy will grow only slightly in 2011, a more negative outlook from July when most called for more robust improvement, according to a survey of U.S. companies released Monday.

The National Association for Business Economics, in its quarterly industry survey of 70 corporate economists, found companies have curtailed plans to hire amid predictions for continued sluggish growth. Yet there were some bright spots, as the survey found significantly more firms reporting rising sales than declining sales.

“Expectations for growth deteriorated quite significantly but the bulk of respondents are not predicting a recession,” said Shawn DuBravac, chief economist for the Consumer Electronics Association and one of the authors of the report.

The economists surveyed by the NABE expect tepid growth, with 82% predicting the gross domestic product will increase by 2.0% or less this year from 2010, and 3% said the economy would in fact contract. That’s a big swing from July when 76% said GDP would grow by 2.1% or more.

Those projections compare with 2.5% to 3.0% range the Federal Reserve forecast in June for 2011 GDP growth.

The Commerce Department is set to release initial GDP figures for the third quarter on Thursday. Economists surveyed by Dow Jones Newswires forecast a 2.7% increase.

“The economy will grow, just less than expected three months ago,” DuBravac said. . . .

Just 29% of respondents said they expect employment will increase in the next six months–the lowest number since January 2010. The survey showed 12% of respondents expect the labor market to weaken further while most say it will remain in its current state. . . .

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