WASHINGTON - Top forecasters say the economy will grow this year and next at a slower pace than previously thought, weakened by governments and consumers spending less so they can pay down debt.
So says a new survey released Monday by the National Association of Business Economics. The 46 economists polled tempered their expectations after seeing weak economic data in recent months. The panel reduced its forecast for annual economic growth to 2.6 percent in 2010 and 2011. That's down from its forecast of 3.2 percent in May.
The economists expect the economy will add jobs through the end of 2011, but not enough to bring the unemployment rate down below 9.2 percent. They don't see home prices rising much or the nation's soaring deficit falling much.
The mainly downbeat report comes as persistently high unemployment, weak consumer spending and stagnant wages drag on the U.S. economy. The nation emerged last summer from the deepest recession since the 1930s. But the economic recovery has not yet led to widespread job gains or growth.
"This summer's slowdown has exposed the economy's sensitivity to wealth losses, the unwinding of debt, and the reductions in economic stimulus," NABE President-elect Richard Wobbekind said in a statement.
The group's survey is conducted four times a year. It compiles economists' big-picture expectations for factors such as growth, hiring, home prices and spending. The economists work for industry groups, government agencies, banks and economic analysis firms.
The economy grew at a 1.7 percent annual rate in the second quarter, according to the government's latest estimate. That's a sharp slowdown from a 3.7 percent growth rate logged in the January-March quarter. Most economists expect growth to be similarly weak in the July-September quarter, with estimates ranging between 1.5 percent and 2 percent.
Consumer spending accounts for about 70 percent of economic activity. Economists told the NABE that consumer spending is likely to remain low over the next year, with families spurning retailers during the holiday shopping season. - AP