21 October 2013 18:10 [Source: ICIS news]
WASHINGTON (ICIS)--The US economy continues to expand at a moderate pace, a key survey of corporate economists said on Monday, although jobs growth and wages slowed in the third quarter, offsetting improving profit margins for companies.
In its monthly survey of top corporate economists, the National Association for Business Economics (NABE) said that “sales growth accelerated in the third quarter, despite potential headwinds such as rising interest rates and oil prices, and a renewed wave of policy uncertainty”.
“Profit margins rebounded after weakening in the previous quarter, while gains in capital spending matched those reported in the first half of the year,” NABE said.
On the downside, however, “employment growth, though still solid, slowed in the third quarter, wage and salary growth also slowed, and plans for near-term hiring and capital spending moderated”.
Despite those slowing indicators, NABE said that its survey respondents “are marginally more upbeat” about the nation’s economic prospects over the next 12 months.
“Nearly 70% [of respondents] forecast real GDP growth of between 2% and 3% over the next four quarters,” said NABE survey chairman Timothy Gill.
But in July this year, more than 70% of NABE survey respondents were hopeful of GDP growth of more than 2% over the next four quarters.
Gill also said that while corporate economists are “guardedly optimistic” about GDP growth in the coming 12 months, they anticipate that rising oil prices and implementation of the Affordable Care Act (ACA) will exert “heightening drag” on sales and employment going forward.
The ACA, President Barack Obama’s signature policy achievement, mandates health insurance coverage for all citizens and imposes fines on those who refuse to sign up for coverage.
The programme has experienced widespread problems since its 1 October launch, and many critics charge that it will reduce employment and raise healthcare costs.
($1 = €0.73)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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