NEW YORK – The pace of the U.S. economic recovery will remain steady but slow in the face of persistently high unemployment and heavy debt burdens, according to a new survey.
The National Association for Business Economics survey, set to be released Monday, found economists now expect growth of 2.7 percent this year, up slightly from the previous forecast of 2.6 percent.
For 2011, the group still expects an economic expansion of 2.6 percent.
The likelihood of either stagflation or relapse into recession was seen as low. But high unemployment, debt and severe loss of wealth are expected to hamper a more robust rebound, according to the survey
"Confidence in the expansion's durability is intact, but panelists remain concerned about high levels of federal debt, a continuing high level of unemployment, increased business regulation, and rising commodity prices," said Richard Wobbekind, president of NABE and an associate dean of the Leeds School of Business at the University of Colorado. "
The 51 members surveyed by the group said they also expect consumer spending to remain modest, with this year's holiday retail sales expected to rise just 2.5 percent from last year.
Meanwhile, the number of jobs employers add to their payrolls is forecast to average less than 150,000 a month before picking up in the latter half of next year. The unemployment rate is expected to remain elevated at 9.5 percent or higher through early next year. It's expected to ease only slightly to 9.2 percent by the end of 2011.
That would mark the weakest post-recession job recovery on record, the group said.
The outlook on housing also remained tepid, with the group scaling back its expectations for housing starts this year to 720,000, from its forecast of 750,000 last month.
The bright spot in the survey was business spending, with sustained, double-digit growth projected through the end of next year. Spending on structures is now expected to grow 1.8 percent in 2011. That's still weak, but better than the previous forecast of 0.2 percent contraction.
NABE panelists also said they expect the federal funds rate to remain near zero until late next year. The 10-year Treasury note is now expected to yield 3.25 percent by the end of 2011, compared with the 3.75 percent forecast last month.
The survey was taken between Oc.t 21 and Nov. 4.