NEW YORK (CNNMoney.com) -- The economy will remain sluggish early next year as the lingering effects of the recession continue to drag on growth and the benefit of government stimulus fades, a panel of professional forecasters said Monday.
In its November outlook, the National Association for Business Economics predicts that the U.S. economy will grow 2.7% this year. That's a slight improvement from the October survey, but is a far cry from the 3.2% rate the survey had projected in May.
Richard Wobbekind, the association's president, said in a statement that NABE members expect economic growth to be "sub-par" in the first quarter of next year, and "moderate" for 2011 overall.
The dim outlook reflects ongoing "balance-sheet restructuring" as consumers and businesses pay down debt and remain cautious about spending, he said. In addition, the inventory restocking that helped boost economic activity earlier this year will be "diminished" going forward, as will government supports under last year's Economic Recovery Act.
While NABE economists are concerned about the long-term effects of the U.S. budget deficit, high unemployment, changes in business regulation and rising commodity prices, they do not expect the economy to relapse into recession or suffer deflation.
"Confidence in the expansion's durability is intact," said Wobbekind.
Looking ahead, NABE expects economic growth of 2.4% in the first three months of next year, a slight improvement from the October survey. For the full year, NABE sees gross domestic product, the broadest measure of economic activity, expanding 3% in 2011.
Despite the modest growth forecast, the economists anticipate conditions in the labor market will improve slowly in the second half of next year, with employers expected to 150,000 to 170,000 jobs per month.
The unemployment rate will hold above 9.5% in the first six months of 2011, before easing to 9.2% by the end of the year, according to NABE.
Given the weary job market and "negligible growth" in household net worth, the economists expect retail sales this holiday season to be subdued, rising 2.5% from last year.
However, business spending on equipment and software will strengthen into next year, and the "tepid" recovery in the housing market will remain intact, the economists said.
The U.S. trade deficit will continue to widen as the outlook for exports has deteriorated while import growth was revised higher in the November survey. The net-export deficit will top $460 billion in 2011, according to NABE.
Global trade imbalances have been in the spotlight recently as economies with large deficits, including the United States, have called on surplus countries such as China to increase domestic consumption and refrain from devaluing currencies.
While the economists said there is a relatively low risk of "competitive currency depreciation" next year, they still expect the U.S. dollar to remain weak.
The dollar has been under pressure since the Fall, as investors bet the Federal Reserve would pump more money into the economy. The central bank officially announced its $600 billion bond-buying program earlier this month.
With that in mind, the economists expect the Fed to hold short-term interest rates near zero until late 2011, "due to the mix of persistently high unemployment and very low inflation."
Gawker conceded Thursday that it has hired bankers to advise them on a possible sale as a "contingency" against multi-million dollars lawsuits filed against it. More
The overwhelming majority of young, wealthy millennials believe that impact investing is important to their decisions, according to a new survey. More
A lawsuit against Snapchat has been put on hold after the company said its app wasn't being used during a car crash. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
The Wall Street bank joins a growing number of employers that seek to provide employees with more qualitative, constructive and ongoing feedback. More