Modest US Growth in 2013, Housing Recovery to Continue: NABE
The U.S. economy will stay on a moderate growth path in 2012 amid weak consumer spending and business investment, a new survey published on Monday said.
The National Association for Business Economics forecast gross domestic product would grow at an average annual rate of 2.1 percent in 2013. It predicted a 2.2 percent rate in 2012. The estimates are little changed from October's survey.
"The panelists forecast little improvement in consumption growth, significantly reduced growth in investments in nonresidential structures, equipment, and software, and reduced growth in corporate profits and industrial production," said Nayantara Hensel, chairperson of the NABE Outlook Survey.
The economy has been hit by headwinds from the European debt crisis and lately, concerns that lawmakers will fail to prevent a raft of government spending cuts and tax increases from kicking in early in 2013 and drain about $600 billion from the economy.
The survey forecast the budget deficit shrinking to $900 billion in 2013 from an estimated $1.09 trillion this year. It predicted that the debt crisis in Europe would worsen next year.
Growth in consumer spending, which accounts for about 70 percent of U.S. economic activity, was seen averaging 2 percent in 2013, less than the 2.5 percent growth in 2011, and slightly higher than the 1.9 percent growth forecast for 2012.
But it is not all bad news for the economy.
The labor market is seen improving, with nonfarm payrolls averaging 165,000 jobs per month next year. That is an improvement on the 155,000 jobs per month estimated in October.
So far in 2012, job gains have averaged 151,000 per month. The survey forecast the unemployment rate averaging 7.7 percent in 2013, down from the 7.9 percent predicted in October.
The jobless rate fell 0.2 percentage pint to 7.7 percent in November, but the entire decline was because of people dropping out of the labor force.
The survey forecast that the U.S. housing market recovery will continue next year, with strong gains in residential construction and home prices. (Read More: Housing Recovers, but the Repo Man Is Back)