Economists trim US 2011 growth forecasts
U.S. economists raised their forecast for economic growth in 2010 in March, the third straight monthly rise, while trimming their growth forecast for 2011, according to a survey released on Wednesday.
Economists surveyed earlier this month in the Blue Chip Economic Indicators newsletter said the economy is expected to grow by 3.0 percent in 2011, which is 0.1 percentage point lower than estimates made a month ago.
But economists raised their 2010 growth forecast for the third consecutive month to 3.1 percent, up 0.1 percentage point from February.
Still, the economists predicted the recovery would be mild given the depth of the recession.
The consensus also expects inventories to continue adding to GDP over the next several quarters but see the size of those contributions become increasingly smaller.
“By Q1 2011, the contribution to GDP from business inventories is expected to become trivial,” the survey said.
The panelists said they also expect “a slower and less powerful than is typical improvement in labor market conditions that will cap gains in disposable personal income and personal consumption expenditures.”
The panelists expressed concern that severe winter weather crimped economic activity in February and that upcoming monthly data on production, retail sales, housing starts and home sales could fall short of earlier consensus expectations.
However, they also pointed out any weather-induced softness should be recovered in the March data.