U.S. business economists boost 2010 growth outlook

WASHINGTON, Feb 22 (BestGrowthStock) – A group of U.S. business
economists raised their forecast for economic growth over the
coming year, saying economic expansion was firmly on track, a
survey released on Monday showed.

The National Association for Business Economists predicted
gross domestic product in 2010 would expand at a 3.1 percent
growth rate, up from its November forecast for 2.9 percent
growth. It will expand at a 3.2 percent growth rate in 2011.

“We see a healthy expansion under way, although it will
take time to reduce economic slack and repair damaged balance
sheets,” said NABE President Lynn Reaser, chief economist at
Point Loma Nazarene University.

The group said economic expansion is on track for a
resumption of job growth in the near term and they are
“sticking with their November prediction of an end to the
jobless recovery.”

The median forecast is for an average monthly increase of
50,000 jobs during the first quarter of 2010, up from
November’s forecast of no net change, NABE said.

The jobless rate is expected to decline to 9.6 percent by
the fourth quarter, comparable with November’s prediction of
9.5 percent, the group said.

President Barack Obama has made job creation his top
priority in 2010, in an effort to rein in stubbornly high
unemployment.

The economy has shed 8.4 million jobs since December 2007,
when the recession began.

The panelists said they expect interest rates would remain
low and do not expect the Federal Reserve to raise the federal
funds rate until late in the third quarter of 2010, followed by
a series of increases at a measured pace.

The panel expects the core personal consumption
expenditures deflator to rise 1.5 percent this year and 1.7
percent in 2011.

Inflation will remain low mostly because of expectations
that unit labor costs will show no net increase over the year.

Government spending will grow slowly over the next two
years, the group said. Panelists expect the federal budget gap
to remain very high.

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(Reporting by Nancy Waitz, editing by Maureen Bavdek)

U.S. business economists boost 2010 growth outlook