The jobless rate, which dipped to a five-year low of 6.6 percent in January, will fall to 6.3 percent by the year-end, their median forecast shows.
Job gains, which averaged 194,000 a month last year, will reach a monthly average of 200,000 this year, they predict. Employers added 113,000 jobs in January, well under economists’ forecasts, the government reported last week.
The economy got off to a slow start in January amid financial turmoil in emerging markets, a stomach-churning drop in stock prices and extreme winter weather that kept many shoppers at home. But the economists surveyed expect growth to accelerate after a weak first quarter, reaching a solid 2.8 percent rate for the year.
“I think we will regain momentum and not fall on our face,” says economist Diane Swonk of Mesirow Financial, drawing a contrast with previous ups and downs in the 5-year-old recovery.
Many of the 40 economists surveyed Feb. 5-6 recently cut their first-quarter forecasts. Most of the change is due to adverse weather and an expected pull-back in business stockpiling after firms aggressively replenished shelves in the second half of 2013.
While growth late last year was driven by the stockpiling, this year’s expansion will be fueled by higher consumer and business spending, says Dean Maki of Barclays Capital. “It’s more durable.”
Many were anticipating a breakout year in 2014, signaling a new course for a sluggish recovery. Households have shed much of the debt they amassed in the mid-2000s real estate bubble. A stock run-up and rising home prices have made consumers feel wealthier. And the effects of federal spending cuts and tax hikes are fading, while state and local governments are poised to boost outlays after years of austerity.
Some see financial troubles in emerging markets such as Turkey as risks to the USA’s outlook. But 64 percent said their 2014 forecasts are more likely to prove too conservative than too rosy.
Copyright © 2014 USA TODAY, Paul Davidson, and Barbara Hansen
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