Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Economists: Recovery is firmly on track

By Chavon Sutton, staff reporter


NEW YORK (CNNMoney.com) -- Leading economists are upbeat about the U.S. recovery, forecasting steady growth over the next two years as businesses grow and jobs return, according to a survey released Monday.

"We see a healthy expansion under way, although it will take time to reduce economic slack and repair damaged balance sheets," said Lynn Reaser, president of the National Association for Business Economics, which conducted the survey of 48 top economic forecasters in late January and early February.

The NABE panel says it "expects the recovery to remain firmly on track." Its forecast is for the economy to grow 3.1% in both 2010 and 2011, an estimate that is essentially unchanged from the 3.2% target in NABE's November survey. The group's estimate is a marked improvement from last year's survey, which had forecast that the economy would contract.

Most economists surveyed expect the recovery to be led by businesses. The NABE estimates that corporate earnings will grow 15% this year, which will spur hiring and ultimately bolster household spending.

"Businesses are in position to take up some of the slack because of rebounding profits," said Reaser, who is also chief economist at Point Loma Nazarene University. "Our economists believe improvement in sales and profits will cause them to put out the hiring signs relatively soon," said Reaser.

The NABE panelists expect that jobs will return slowly this year, forecasting an average monthly increase of 50,000 jobs in the first quarter, followed by average monthly job gains of 103,000 the rest of the year. The unemployment rate, which now stands at 9.7%, is expected to tick down to 9.6% by the fourth quarter.

As jobs return, so will consumer spending, which should rise by 2.2% in 2010 and then climb 2.8% in 2011. These relatively small gains can be attributed to the fact that Americans are still feeling financially conservative.

"Overall, our economists believe we are on a fairly healthy growth track and their will be no double dip recession," said Reaser. To top of page

Index Last Change % Change
Dow 16,058.35 -469.68 -2.84%
Nasdaq 4,636.11 -140.40 -2.94%
S&P 500 1,913.85 -58.33 -2.96%
Treasuries 2.17 -0.03 -1.27%
Data as of 2:51am ET
Company Price Change % Change
Bank of America Corp... 15.58 0.05 0.32%
Apple Inc 107.72 -5.04 -4.47%
General Electric Co 23.88 -0.94 -3.79%
Ford Motor Co 13.72 -0.15 -1.08%
Microsoft Corp 41.82 -1.70 -3.91%
Data as of Sep 1
Sponsors

Sections

McDonald's has been testing an all-day breakfast menu in several markets for months. Now it has said when the change will go nationwide: October 6. More

Iran could be pumping more than four million barrels of oil a day by the end of 2016, the country's oil minister tells CNN in an exclusive interview. More

How do you run a successful crowdfunding campaign? Indiegogo's CEO Slava Rubin offers his top tips and mistakes to avoid. More

Here's what you need to earn to afford a home in the 27 biggest metro areas in the country, according to HSH.com. More