Economy Improving, But Expectations are Modest

The National Association of Business Economists (NABE)has released the results of its most recent survey on the economic outlook for the US for 2012 and 2013. The group’s chief economist summarized the results this way:

Economists responding to the latest NABE Outlook Survey are seeing strength in a number of economic measures and have subsequently increased their expectations for employment, housing starts, and business spending. Despite increases in a number of forecasts, however, economists remain guarded on US economic growth, with the median forecast of respondents calling for inflation-adjusted gross domestic product—real GDP—of 2.4 percent for the year in 2012. Respondents continue to expect consumer spending to grow below trend in 2012 and the federal deficit to increase before it eventually declines. Economists’ expectations for export growth have also weakened over the last four months. Collectively, forecast uncertainty among the economists appears to have diminished slightly over the last several months.

On the whole, NABE forecasters expect unemployment to fall to 8.3% for 2012, business investment to grow 8.1% in 2012 and 7.3% in 2013, consumer spending to remain “subdued,” and housing starts to increase by 19%. The best news, perhaps, is that the forecasters are somewhat less uncertain about the US economy than they have been.