CHICAGO - Economists expect the recovery to remain "firmly on track" over the next two years though job growth is likely to remain slow, a new survey says.
The latest outlook from The National Association for Business Economics, issued Monday, sees regular job gains resuming this quarter but no drop in unemployment below 9 percent for another year. Consumer spending will be sluggish as consumers dig out of debt, but inflation is expected to remain subdued, and home prices should rise at a rate slightly above inflation in 2010 and 2011.
"We see a healthy expansion under way, although it will take time to reduce economic slack and repair damaged balance sheets," said Lynn Reaser, NABE president and chief economist at Point Loma Nazarene University.
The forecast is largely consistent with its last quarterly forecast in November and reflects an economy in slow-but-steady recovery mode.
Its prediction that unemployment will decline only to 9.6 percent by the fourth quarter also mirrors the Federal Reserve's forecast last week that the jobless rate will remain high over the next two years because businesses are likely to stay cautious about taking on more workers. NABE economists foresee an average monthly gain of 103,000 jobs this year. The survey was conducted before the government released the January unemployment rate, an unexpected drop to 9.7 percent. - AP