A newly resilient economy is poised to expand this year at its fastest pace since 2003, thanks in part to brisk spending by consumers and businesses, the Wall Street Journal writes.
In a new Wall Street Journal survey (subscription required), many economists increased their growth forecasts because of recent reports suggesting a greater willingness to spend.
The 51 economists polled expect gross domestic product will be 3.5% higher in the fourth quarter of 2011 than a year earlier — up from the 3.3% increase they projected in last month’s survey, the WSJ reports. That would be the largest increase since 2003. They look for GDP to expand at a 3.6% annual rate in the current quarter, accelerating from the 3.2% rate recorded in the final months of 2010.
Economists expect the unemployment rate will end the year at 8.6%—below January’s 9%, but still high by historical standards, the WSJ writes.
Since late last summer, the economy appears to have strengthened considerably, the WSJ writes. The economists put the risk of a return to recession at 12%, down from 22% in September.
The headwinds to expansion appear to be subsiding. A majority of economists say that rising commodity prices are due to supply-and-demand issues stemming from world-wide growth — not bubbles blown by monetary or fiscal policy, the WSJ writes.
And nine of 10 say the turmoil in Egypt hasn’t substantially altered their outlook, the WSJ reports.
- Henry Unger, The Biz Beat
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