WASHINGTON — The outlook is for more of the same, slow growth and high unemployment, a panel of 51 economists assembled by the National Association for Business Economics said Monday, although business spending is seen as a continuing “bright spot.”
The survey, taken from Oct. 21 through Nov. 4, showed only modest changes from the previous month, with this year’s GDP upgraded a tenth to 2.7%.
The jobs picture remains one of continued monthly payrolls gains of 150,000 or less until the second half of next year, and then not much better.
The trade deficit is now seen widening somewhat more than previously, with oil prices a little higher than in the previous forecast.
The low interest rate environment is maintained through next year in the latest consensus forecast, yet inflation is still seen as a greater threat than deflation.
“The federal funds rate will remain near zero until late in 2011 due to the mix of persistently high unemployment and very low inflation,” the report said. “Relative to the October survey, panelists have marked down their forecast for the path of the federal funds rate,” now projected to remain below 20 basis points throughout the forecast period — in contrast to the previous expectation of an increase to 50 basis points by year-end 2011.
— Market News International
