Survey: Economists more upbeat about job growth

A job seeker holds a job application during the San Francisco Hirevent job fair at the Hotel Whitcomb on March 27, 2012 in San Francisco, California. As the national unemployment rate stands at 8.3 percent, job seekers turned out to meet with recruiters at the San Francisco Hirevent job fair where hundreds of jobs were available.
Getty Images/Justin Sullivan

(AP) NEW YORK - A new survey shows U.S. economists are growing slightly more optimistic about recovery in the job and housing markets but expect other pillars of the economy to remain weak.

The National Association for Business Economists says in a report issued Monday that its forecasters expect modest growth for the remainder of the year, with the pace picking up in 2013.

Still, the 54 economists NABE surveyed expect consumer spending, business investment and gross domestic product to remain below historic norms.

The quarterly survey compiles expectations for indicators such as hiring, home construction and spending from economists at industry groups, government agencies, banks and consultancies.

The panel now expects average monthly job growth for 2012 of 188,000, up from its forecast in February for 170,000 new jobs per month in 2012. The improved outlook would lead the unemployment rate to fall to 8 percent by the end of the year, the economists said. The rate is now 8.1 percent. By the end of 2013, the unemployment rate is expected to ease further to 7.5 percent.

The NABE economists expect housing starts to rise 18 percent to 720,000 units this year and increase again to 850,000 in 2013. Residential investment is forecast to increase 8.8 percent this year; that's better than the 6.6 percent the economists predicted in February. In 2013, they now expect a 10.4 percent rise, up from 10 percent.

The outlook for light vehicle sales is also brighter, and the NABE panel now expects sales to reach 14.5 million units this year, up from their previous forecast for 14 million units. In 2013, they now expect 14.8 million light vehicles to sell, up from a forecast for 14.6 million.

On a broader level, however, the panel's forecast remains relatively bleak.

GDP, which reflects the economy's total output of goods and services, is predicted to grow just 2.4 percent this year, which is shy of the roughly 2.5 percent growth forecast by the Federal Reserve. For 2013, the panel of NABE economists expects the GDP to grow 2.8 percent.

Panelists also say consumer spending will grow 2.2 percent this year and 2.5 percent in 2013, below the historic average rate of 2.8 percent.

After-tax corporate profits are projected to rise 5 percent this year and 6.3 percent next year. The NABE economists earlier forecast 6.3 percent growth in 2012 and 7 percent in 2013. The annual average over the past 20 years is 10.2 percent.

NABE's panel now expects real spending on nonresidential structures to grow 2.9 percent, down from the 4.2 percent they forecast in February.

The panel revised its projection for industrial production upward to 4.1 percent in 2012. Panelists still expect labor productivity growth to pick up from last year's rate of 0.4 percent, rising to 1 percent in 2012 and to 1.4 percent in 2013.

And they expect a trade deficit of $562 billion this year, up from $535 billion. For 2013, they expect a deficit of $569 billion, up from $525 billion.

The NABE surveyed its 54 panelists April 19 to May 2.