Economists see low GDP, high joblessness for 2012
The U.S. economy will avoid slipping into another recession but growth will remain so anemic that the high rate of unemployment will barely budge at least through the end of next year, professional forecasters said in a new survey released Monday.
Gross domestic product is now predicted to grow 2.4 percent for all of 2012, according to economists at the National Association of Business Economics (NABE), a professional association of forecasters.
Although that's better than the 1.8 percent GDP growth predicted for 2011, it's still too slow to make much of a dent in the unemployment rate, which has been stuck at 9 percent or higher since March.
The new NABE survey is in line with the outlooks of other private economists, who are slightly less worried about the country slipping into a recession than they were in the late summer.
More on the economy: Unemployment rate dips amid sluggish jobs growth
"Despite a relatively subdued outlook, the panel estimates that the odds of a second recession remain low," Shawn DuBravac, chief economist for the Consumer Electronics Association and the chairman of the NABE forecasting panel, said in a statement.
Only two of 42 NABE forecasters on the panel predicted that the U.S. economy would suffer a decline over the near-term. But 72 percent of the panel members characterized the economic outlook as either "somewhat" or "much" more uncertain than usual. That figure, while high, was down from 86 percent who characterized the outlook that way in the September survey.
Report: Europe's economy on verge of recession
Europe is one of the biggest downside risks facing the United States currently, Mark Zandi, one of the panel members and chief economist at Moody's Analytics, told The Associated Press. The region is dangerously close to falling into another recession as economic growth has all but come to a standstill, the European Union said in a recent report.The recovery in 27-member European Union -- the world's largest economy -- has stopped and is expected to stagnate until well into 2012, according to official forecasts from the EU's European Commission.
Zandi added that another threat is that Congress is unable to resolve big differences over taxes and spending. The impasse could result in Congress failing to extend a 2 percentage point cut in the Social Security payroll tax that is due to expire at the end of this year.
In additional Washington, D.C., gridlock, the Joint Committee on Deficit Reduction (also known as "The Supercommittee") said Monday that it failed in its mission to create a bi-partisan plan to address the nation's ballooning debt and deficit.
The new NABE forecasts for economic growth this year and next are still well below the 3 percent growth registered in 2010. They also fall short of expectations at the beginning of 2011 that the economy would match or surpass last year's growth.
Forecasters now believe the economy will grow at the same 2.5 percent rate in the October-December period and would turn in 2.4 percent growth for all 2012. That would be far below the 4 percent to 5 percent growth needed to ease the unemployment rate. As a result, the NABE expects the unemployment rate to average 8.9 percent for all of 2012.
The Associated Press contributed to this report