WASHINGTON - Private economists have revised forecasts for the U.S. unemployment rate this year down to 8.3% and are "seeing strength" in recent economic data, according to the latest survey of the National Association for Business Economics released Monday.
The jobless rate forecast is down from 8.9% in November. Average monthly payrolls were projected at 170,000 this year, up from 127,000 forecast in the last NABE Outlook in November. Economists see 2013 unemployment at 7.8%, with average monthly payroll gains of 183,000.
The NABE survey left its 2012 GDP forecast unchanged at 2.4%, with growth strengthening in the second half and rising to 2.8% in 2013. First-quarter growth this year was revised down 0.2 points to 2.0%, while Q2 GDP was revised up 0.1 points to 2.4%.
Panelists took the Federal Reserve at its word that it will keep the federal funds rate near zero through the end of 2013, though economists expect long-term Treasury yields to rise steadily as the time for tightening approaches. The 10-year Treasury yield is seen at 2.5% by the end of this year, rising to 3.0% at the end of 2013.
Economists "are seeing strength in a number of economic measures," said NABE President Gene Huang, chief economist of FedEx, in a statement. But "despite increases in a number of forecasts, economists remain guarded on U.S. economic growth."
The survey found uncertainty over economic outlooks is "subsiding" in the last few months, with 47% of panelists describing their forecasts as "somewhat uncertain or more uncertain than usual," down from 72% in November.
Core PCE price forecasts were left unchanged at 1.8% this year and seen at 1.9% in 2013, below the Fed's target inflation rate, as "persistent economic slack will cause inflation to remain quiescent over the economic horizon," the survey found.
Headline consumer prices are seen slightly higher at 2.1% this year due to rising energy costs. Crude oil was forecast at $100.3/bbl at the end of this year (revised up from $94.8/bbl in November) and $105/bbl in 2013.
Consumer spending was likely to remain "subdued" and below long-term trends at 2.1% this year, unchanged from November's survey, and 2.3% in 2013.
Upside economic trends since November included housing starts, now seen at 700,000 this year -- up from 660,000 -- and rising to 850,000 next year, while FHFA home prices will likely be unchanged in 2012.
Business spending for 2012 was also revised up slightly to 8.1% from 8.0%, while industrial production was revised up 0.2 points to 3.5%. Auto sales were revised up 700,000 to an annual rate of 14 million this year and 14.6 million in 2013.
A more downbeat view has developed over real exports, now projected to rise 4.6% this year, down from a 6/1% prediction in November. Import growth was also revised down to 3.5% this year from 4.3%. The expected trade deficit was revised up to $535.4 billion from $488.6 billion.
The S&P 500 meanwhile was forecast to reach 1,400 by the end of this year -- up from 1,380 forecast in November -- and hit 1,500 by the end of 2013. Corporate profits were seen up 6.3% this year, revised up from 6.0%.
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