A survey of Economists finds the outlook for 2011 is grim. The latest AP Economic Survey show economist gloomier than the past three months. They see sluggish growth and higher unemployment. As a result these economist see interest rates remaining near zero until next spring at the earliest.
There is some good news the majority of the 42 economists polled say the recovery is still there. That implies there a good chance of US won’t go into a double-dip recession.
The AP survey compiles forecasts of leading private, corporate and academic economists on a range of indicators, including employment, consumer spending and inflation. Among their forecasts:
_ Economic growth the rest of this year and early next year will weaken, to less than 3 percent. From January through May, the economy grew at roughly a 3.5 percent pace.
_ The unemployment rate will be no lower at the end of the year than it is now — 9.5 percent. A majority think it will be 2015 or later before the rate falls to a historically normal 5 percent.
_ State budget shortfalls pose a “significant” or “severe” risk to the national economy. The loss of tax revenue has forced state and local governments to cut services and lay off workers.