Economists see U.S. recovery weakening -survey

WASHINGTON, July 10 (BestGrowthStock) – The U.S. economy will lose
steam as the year progresses but will not slide back into
recession, even though unemployment is unlikely to fall
significantly, according to a survey released on Saturday.

The Blue Chip Economic Indicators survey of private
forecasters found analysts increasingly glum about the outlook.
They now see the economy expanding just 3.1 percent in 2010,
down from 3.3 percent in the June poll.

They do not, however, envisage a renewed period of
contraction, which has been widely debated in financial markets
in recent weeks.

“Our panelists think talk of a double-dip recession is
overblown absent a new, major shock,” the group said in its
report.

Some analysts worry such a disruption might come from
Europe, where concerns about high debt levels have made the
banking sector jittery about lending.

The report’s findings highlight the risks of a sputtering
recovery amid lingering softness in housing, suggesting the
unemployment rate will end the year at 9.4 percent, barely down
from the current 9.5 percent rate.

“For a second straight month the number of panelists that
lowered their forecasts of nominal GDP growth and inflation
exceeded those that raised their forecasts by a significant
margin,” the report said.

“In the past, such a development has often suggested
further erosion in consensus forecasts during subsequent
survey.”

Along with more moderate growth, inflation is expected to
remain extremely tame. Forecasters are looking for a 0.9
percent increase in prices for 2010 as a whole, the smallest
rise since 1950.
(Reporting by Pedro Nicolaci da Costa; Editing by Leslie
Adler)

Economists see U.S. recovery weakening -survey