Despite looming financial deadlines in Washington, D.C., including the immediate threat of $85 billion in mandatory budget cuts Friday, a group of private economists has a fairly upbeat view of the outlook.
The survey from the National Association for Business Economics looks for economic growth of 2.4 percent in the United States this year. Beyond that, the group expects gross domestic product to accelerate to 3 percent in 2014. Economist Nayantara Hensel of National Defense University, a spokeswoman for the group, concedes that she was surprised that the survey didn't reflect more downside risk associated with the budget issues. Says Hensel, "It is true that the panelists do expect the economy to grow. At the same time, they've been saying that growth this year is likely to be negatively affected" by budget issues.
In the near term, nearly 60 percent of the economists surveyed expect the sequester to take place in either "partial" or "full form" Friday.
As for the job market, the survey finds that economists expect the unemployment rate to average 7.7 percent this year and decline to 7.2 percent in 2014. With the Federal Reserve targeting an unemployment rate of 6.5 percent, Hensel says the group expects quantitative easing to continue over the next couple of years. The central bank has been engaged in $85 billion in monthly bond-buying with the aim of stimulating the economy.
The panel of 49 economists was surveyed from Jan. 28-Feb. 5.