Due to a reduction in spending by both businesses and consumers, most analysts have reduced the forecast growth outlook for 2013.
Consequently, the original forecast of 2.8% that was forecast in May has been downgraded to 2.4% anticipated growth for the next calendar year. This according to a survey conducted by the National Association for Business Economics headquartered in Washington.
This downgraded economic forecast reflects anticipated growth over the current year and the upcoming year. For the current year, analysts had originally projected a 2.4% economic growth. That predicted growth was eventually downgraded to 1.9%.
Additionally, the anticipated growth over years 2012 through 2013 is anticipated to be less than moderate. However, to put a positive spin, the growth will be slow but steady through 2013.
Shawn DuBravac reviewed the survey that was released and indicated that the United States economy will likely avoid the impending fiscal cliff that is looming. This fiscal cliff is defined as the federal spending cuts and increases in taxes that will kick in automatically at the beginning of the next congressional session in January if Congress does not take actions to intervene.
The “height” of that fiscal cliff is $600 billion representing a combination in government cuts and increased taxes. Not all economists agree as to what the implications are of these automatic actions to be implemented in January. However, most economists agree that most of the pending actions will not be avoided and therefore will not have a negative impact on the economy.
Adding to the decline in the economy’s growth is the anticipated response of the consumer in America as job growth and personal income levels will remain less than moderate. The bright spot in the financial picture is the apparent rise in value of home prices and an increase in construction of new homes.
The anticipated unemployment rate that is forecast for the fourth quarter was elevated to a level of 8.1%. This is an increase from the original forecast of 8%. The reality of unemployment was reported to be 7.8% for September. This fall in employment was in comparison to the forecast unemployment rate of 8.1%.
For the current calendar year, the economy grew at a rate of 2% for the first quarter and fell to a level of 1.3% for the second quarter. The anticipated average growth for the current calendar year, as polled by economists, is anticipated to be at 2.1% and at a level of 2% for 2013.
In regards to increases in salary, the NABE is forecasting a growth of payrolls to increase by 155,000. This monthly forecast reflects a decline of monthly payrolls as anticipated in the month of May when the forecast was placed at 200,000.
The anticipated unemployment rate is forecast to be 7.8% by the end of 2013.
Other economic forecasts include anticipated corporate profits rising by 7%. This figure is an increase from the original forecast in May of 5%. Additionally, the forecast for housing is anticipated to be at an increase of 13% or a total of 850,000 in the year 2013.
The NABE has a membership of 2400 individuals and originated in the year 1959.