WASHINGTON (6/10/14)--After a first quarter that saw the U.S. economy contract by 1%, economic growth should mount in the second quarter and consistently build on those gains for the rest of 2014, according to a survey by the National Association of Business Economists (The New York Times June 9).
The survey polled 47 economists from businesses, trade associations and academia from May 8 to 21.
Likely to drive those forecasted improvements are steady inclines in job growth and accelerated consumer spending.
Respondents also largely agreed that the Federal Reserve will completely phase out its bond-buying program--which it has employed for the past few years to spur the economy by holding down lending rates--by the end of this year, likely another sign of a strengthening economy.
Economists predict gross domestic product to expand 3.5% in the second quarter and stick above 3% for the rest of the year. The weak first quarter, anchored by the unusually harsh winter weather, has caused experts to recast their predictions for the year however.
Overall, respondents said growth will climb only 2.5% this year rather than the 2.8% that had been expected.
The Fed is a bit more optimistic, as the nation's monetary policy-making body believes growth can reach 3% by year's end, but the Federal Open Market Committee, which makes decisions for the Fed, could revise that expectation later this month during its first meeting since reports that the economy contracted in the first quarter were released.
Economists also appear to have brighter expectations for hiring, according to the poll. Expectations are that employers will add an average of 209,000 jobs per month for the rest of 2014, up from March's forecast of 188,000.
The increase in job growth, then, should lead to higher levels of consumer spending. Economists said they believe spending will climb 2.9% this year, the strongest rate since 2006.