Economists Survey Says US Growth Could Break 3 Percent By End of Year

With the pace of U.S. economic growth seen speeding up later this year and next, many business economists expect the Federal Reserve to end its bond purchases this fall or even earlier.

The consensus of the 48 economists surveyed by the National Association for Business Economics is that bad weather cut first-quarter growth to a weak annual rate of 1.9 percent, but that growth could exceed 3 percent by year’s end. NABE’s report, released Monday, covered a survey period from Feb. 19 through March 5.

Their forecast for average U.S. economic growth of 2.8 percent this year is better than the 2.5 percent rate they predicted in NABE’s December survey. Those surveyed expect consumer spending to now increase 2.6 percent in 2014, not 2.4 percent, as hourly wage growth is forecast to rise faster than inflation. Gross domestic product is expected to grow an average 3.1 percent in 2015.

“Conditions in a variety of areas–including labor, consumer and housing markets–are expected to improve over the next two years, while inflation remains tame,” NABE President Jack Kleinhenz, chief economist of the National Retail Federation, said in a statement.

Given the stronger growth forecast, 57 percent of the economists surveyed believe the Federal Reserve will end its bond purchases in the fourth quarter, as the central bank has signaled it plans to do.
Another quarter think it will happen even before that, though 17 percent think the Fed will keep buying bonds into 2015.

via CNBC

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