Economists Survey Says US Growth Could Break 3 Percent By End of Year

With the pace of U.S. economic growth seen speeding up later this year and next, many business economists expect the Federal Reserve to end its bond purchases this fall or even earlier.

The consensus of the 48 economists surveyed by the National Association for Business Economics is that bad weather cut first-quarter growth to a weak annual rate of 1.9 percent, but that growth could exceed 3 percent by year’s end. NABE’s report, released Monday, covered a survey period from Feb. 19 through March 5.

Their forecast for average U.S. economic growth of 2.8 percent this year is better than the 2.5 percent rate they predicted in NABE’s December survey. Those surveyed expect consumer spending to now increase 2.6 percent in 2014, not 2.4 percent, as hourly wage growth is forecast to rise faster than inflation. Gross domestic product is expected to grow an average 3.1 percent in 2015.

“Conditions in a variety of areas–including labor, consumer and housing markets–are expected to improve over the next two years, while inflation remains tame,” NABE President Jack Kleinhenz, chief economist of the National Retail Federation, said in a statement.

Given the stronger growth forecast, 57 percent of the economists surveyed believe the Federal Reserve will end its bond purchases in the fourth quarter, as the central bank has signaled it plans to do.
Another quarter think it will happen even before that, though 17 percent think the Fed will keep buying bonds into 2015.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza