Associated Press (10/15/12) Dave Carpenter
The quarterly survey by the National Association for Business Economists released on Oct. 15 predicts economic growth will be weak overall but should slowly accelerate through 2013. The 44 economists surveyed now see gross domestic product increasing by an annual rate of 1.9% in 2012 before reaching a 3% pace in the fourth quarter of next year. Employment growth is forecast to weaken. The panel predicts that the unemployment rate will rise to 8.1% by year’s end. The economy should add an average of 125,000 jobs per month during the fourth quarter, down from the economists’ May forecast of 190,000 jobs.
A widespread concern about the economy has been the combination of spending cuts and tax increases that will kick in starting next year, risking a giant fiscal shock if Republicans and Democrats do not reach a deal on a budget. But a majority of the economists are confident that will not occur. “The panelists’ projections for the fiscal cliff are very diverse, though survey respondents in general do not expect the potentially large negative outcomes of the fiscal cliff to materialize,” says Shawn DuBravac, chief economist at the Consumer Electronics Association, who analyzed NABE’s results.