By Agency reporter

Tuesday, 23 Nov 2010

WASHINGTON: The nation‘s business economists view the United States like a slow-moving freight train, Market Watch reported on Monday.

In its latest survey, the National Association of Business Economists predicts the economy will expand at a 2.6 per cent pace in 2011, down slightly from this year. The NABE upped its forecast for 2010 to 2.7 per cent from 2.6 per cent.

Business economists say faster growth is likely to be sidetracked by high debts, a decline in government stimulus and lower business spending, among other things.

PC giant will report fourth-quarter earnings and shed light on its new Chief Executive Officer, who‘s gone dark because of a legal spat with Oracle. Also there‘s a raft of economic data, including home sales, jobless claims and consumer spending, Rex Crum reports.

The slow pace of economic recovery also means new job growth in 2011 will barely keep pace with the rise in population. The group projects that monthly job growth will average 150,000 or less through the first six months of 2011 before rising to the 170,000 range.

The result: US unemployment rate probably will hover above nine per cent all year. It now stands at 9.6 per cent.

”This will mark the weakest post-recession job recovery on record,” the NABE said.

Most of the group‘s forecasts are little changed from its last survey in October. Consumer spending is likely to grow modestly, as will home sales, while inflation and interest rates are expected to stay low.

The federal deficit, meanwhile, will narrow by $100bn in 2011, but remain at a ”very high” $1.1tn, according to NABE.

”Panelists continue to characterise excessive federal debts as their single greatest concern going forward, even exceeding worries about high unemployment, and far greater than concerns about either inflation of deflation,” the NABE said, echoing the results of its prior survey.

Economists who worry most about federal debt say government borrowing siphons money away from the job-creating private sector.

They also note the debt will have to be paid back, possibly forcing the government to slash spending or raise taxes, both of which could hurt economic growth in the long run.

 

Source: Punch