Economic growth ahead, economists say
Slowdowns in consumer spending and employment will prove temporary, giving way to a U.S. growth rebound in the second half of 2011, economists surveyed by Bloomberg News said.
After growing at a 2.3 percent annual pace this quarter, the U.S. economy will expand at a 3.2 percent rate from July through December, according to the median forecast of 67 economists polled from June 1 to June 8.
Rising exports, stable fuel prices, record levels of cash in company coffers and easier lending rules will be enough to overcome the damage done by one-time events such as poor weather and the earthquake in Japan, economists said. Nonetheless, the current slackening means Federal Reserve Board policy-makers will wait even longer to raise interest rates next year, the economists said..
“The economic headwinds are well known, but if you look at the tailwinds, they are still pretty strong,” said Nariman Behravesh, chief economist at IHS Inc. in Lexington, Mass. “There are a lot of reasons to be fairly upbeat about the recovery. Growth will pick up in the second half.”
The projected gain in second-quarter gross domestic product is down a percentage point from the 3.3 percent estimated last month. At the same time, this month’s forecast for the second half of the year was little changed from May’s prediction of an average 3.35 percent.
For all of 2011, the U.S. economy will grow 2.5 percent, down from the 2.7 percent gain projected last month. The rate of growth will accelerate to 3 percent for the next two years, according to the survey.