Those in Washington have the nation facing some dark days behind the threat of the sequester, but some of the leading economists believe there is a light at the end of the tunnel—and the length of the tube is not nearly as long as some might think.
The National Association of Business Economics (NABE) is forecasting the start of a substantial economic recovery to begin later in 2013, with 2014 producing some of the most positive numbers since 2005.
The latest survey of top crystal-ball operators reveals that the U.S. economy will grow at a rate of 2% this year, but growth in the second half will average 2.5%. The following year will feature a much-needed spike (2.8%), which would mark the best performance in eight years.
“While the NABE forecasters see fiscal threats, they are optimistic that there will be some resolution toward the second half of this year and that will result in an improvement in many of the numbers in 2014,” Nayantara Hensel, an economics professor at the National Defense University in Washington and a member of the NABE panel, told the Associated Press.
The NABE report also predicted the following:
- Unemployment, currently at 7.9%, will decline slowly to 7.5% by the end of 2013 and to 7% by the end of 2014, with an average monthly job growth of 170,000 this year and 193,000 in 2014;
- Inflation will remain modest at around 2%, giving the Federal Reserve leeway to keep a key short-term interest rate at a record low near zero this year and in 2014; and
- New home construction will jump 25.6% this year and another 17.3% in 2014, pushing construction next year to 1.15 million homes.
