US GDP growth expected at 3.5% for rest of '14 – economist survey

09 June 2014 05:00 Source:ICIS News

HOUSTON (ICIS)--Economic forecasters are expecting that US GDP growth will be 3.5% for the rest of 2014, a brighter outlook than they expected three months ago, according to a National Association for Business Economics (NABE) survey released on Monday.

The consensus forecast of the June 2014 Outlook, which polls a panel of 47 forecasters, is that the economy will be bolstered by activity that was postponed by bad weather, NABE president Jack Kleinhenz said in a statement.

The consensus in the March survey had been a forecast of 3% growth in the remainder of 2014.

On an average annual basis, the June survey predicted a 2.5% increase, weaker than the 2.8% predicted in the March survey due to a 1.0% contraction in the first quarter.

The forecast for business equipment investment in 2014 fell to 3.2%, down from 4.0% in the March survey. Investment in non-residential structures has slipped to 4.4%, down from 5.7% in the March survey.

While panellists still predict the housing sector recovery to continue, they are forecasting a slower pace. New housing starts, which were 920,000 units in 2013, are expected to reach 1.03m in 2014, down from the 1.07m prediction in March. The forecast for home prices is unchanged since the March survey, which predicted a 5.0% gain in 2014.

The employment outlook has improved, with nonfarm payrolls expected to gain an average of 209,000 in 2014, compared with the 188,000 prediction in the March survey.

The consumer spending outlook improved, with personal consumption expenditures forecasted to increase 2.9% in 2014, up from the 2.6% prediction in the March survey and up from the 2.4% prediction in the December survey.

By Jessie Waldheim