Bleak picture for US persists

WASHINGTON – Top forecasters say the US economy will grow this year and next at a slower pace than previously thought, weakened by governments and consumers spending less so they can pay down debt.

That’s the findings of a new survey released Monday by the National Association of Business Economics (Nabe).The 46 economists polled tempered their expectations after seeing weak economic data in recent months. The panel reduced its forecast for annual economic growth to 2,6 per cent in 2010 and 2011. That is down from its forecast of 3,2 per cent in May.The economists expect the economy will add jobs through the end of 2011, but not enough to bring down the unemployment rate below 9,2 per cent. They don’t see home prices rising much or the nation’s soaring deficit falling much.The mainly downbeat report comes as persistently high unemployment, weak consumer spending and stagnant wages drag on the US economy. The nation emerged last summer from the deepest recession since the 1930s. But the economic recovery has not yet led to widespread job gains or growth. The biggest concern among the economists was the federal deficit. They predicted it will shrink by only about US$100 billion to US$1,2 trillion – a level the Nabe called ‘extreme’.Foreign trade was not seen weighing on economic growth. The panel said trade deficits would remain constant as a share of gross domestic product, the broadest measure of the economy’s health. Those surveyed forecast a one-third chance of a ‘bubble’ in China’s economy – a low level of concern, the Nabe said. – Nampa-AP

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