WASHINGTON — The economy will fail to strengthen in 2011 as companies limit hiring and consumers curb spending, a survey of economists forecasts.
Gross domestic product will increase 2.6 percent next year after growing 2.7 percent in 2010, according to the median forecast of 51 economists surveyed by the National Association for Business Economics from Oct. 21 to Nov. 4.
“Growth is expected to be moderate,” Richard Wobbekind, president of the group and associate dean of the Leeds School of Business at the University of Colorado at Boulder, said in a statement. “Panelists remain concerned about high levels of federal debt, a continuing high level of unemployment, increased business regulation and rising commodity prices.”
A diminishing need to replenish inventories, the winding down of government stimulus and households’ drive to pay off debt will restrain growth, the survey predicted. The economists polled said the world’s largest economy will add fewer jobs than they predicted last month.
Employment next year will climb by 136,000 a month on average, down from the 153,000 they projected in October, the survey predicted. This month’s canvass was completed before the Labor Department reported Nov. 5 that employers added 151,000 workers to payrolls last month, beating the median estimate of economists surveyed by Bloomberg News.
The unemployment rate will be 9.4 percent or higher through the middle of 2011 before dropping to 9.2 percent by the end of next year, according to economists surveyed.
Consumer spending will expand 1.7 percent in 2010 and 2.4 percent in 2011, the survey predicted. Median projections in October for this year and next were 1.5 percent and 2.3 percent, respectively.
Respondents also said inflation in 2011 will remain below the Federal Reserve’s estimates. Economists forecast that the central bank’s preferred inflation gauge, the personal-consumption-expenditures price index excluding food and energy, will rise 1.3 percent next year after a 1.1 percent gain in 2010.
Fed policymakers have a long-run inflation forecast of 1.7 percent to 2 percent, the level they see as consistent with achieving legislative mandates for maximum employment and stable prices.
About one-third of those surveyed said a Fed decision to buy more Treasury securities could diminish the risk of deflation, and another third said the action could increase the risk of “undesirable” inflation.
GDP
2.6%
Projected growth rate in 2011, down from the projected rate of 2.7 percent for 2010, in the most recent survey of the NABE
Projections based on the median forecast of 51 economists surveyed by the NABE from Oct. 21 to Nov. 4.
CONSUMER SPENDING
2.4%
Projected increase in 2011, up from the projection of 1.7 percent for 2010
INFLATION
1.3%
Projected rise in 2011, up from the projection of 1.1 percent in 2010
JOB GROWTH
136,000
Jobs projected to be added on average per month in 2011, down from the 151,000 jobs added in October 2010
UNEMPLOYMENT
9.2%
Projected rate by the end of 2011, down from the projection of 9.4 percent by mid-2011
