November 23, 2010

Report: Economy will struggle in 2011

BOULDER – The national economy will “struggle against financial headwinds” for the rest of 2010 and 2011, according to the latest survey of national economists led by Richard Wobbekind, associate dean of the Leeds School of Business at the University of Colorado at Boulder.

“Projections for real GDP growth remain sub-par through the first quarter of 2011, but accelerate gradually through the forecast period,” Wobbekind, president of the National Association of Business Economists, said in a statement. “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.”

The panel’s projected growth rate is 2.6 percent for 2011, unchanged from last month, the group said in the statement. In addition, 40 percent of the group now feels that economic expansion in the near future is “sub-par with severe wealth losses and onerous debt burdens inhibiting spending and lending.”  That’s compared to 37 percent of the group who felt the same way in October.

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Some 28 percent of the group is more positive, saying that, “the economy will overcome its headwinds, and behave more in line with a traditional business cycle expansion: real output will grow at a rate above potential, and households and businesses will boost discretionary spending.”

Consumer spending is expected to remain modest, “due to weak job gains, persistently high unemployment, and negligible growth in household net worth.” The economists predict that this year’s holiday retail sales will be “weak,” rising just 2.5 percent from the same period last year.

The November 2010 NABE Outlook is drawn from a panel of 51 professional economic forecasters surveyed from Oct. 21 to Nov. 4. The Washington, D.C.,-based industry group has 2,300 members and 31 chapters across the country.

BOULDER – The national economy will “struggle against financial headwinds” for the rest of 2010 and 2011, according to the latest survey of national economists led by Richard Wobbekind, associate dean of the Leeds School of Business at the University of Colorado at Boulder.

“Projections for real GDP growth remain sub-par through the first quarter of 2011, but accelerate gradually through the forecast period,” Wobbekind, president of the National Association of Business Economists, said in a statement. “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…

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