A snapshot of the AP Economy Survey results

AP News
|
Posted: Oct 28, 2010 6:21 AM
A snapshot of the AP Economy Survey results

The quarterly AP Economy Survey drew upon forecasts from 43 economists. Here are their average predictions, along with historical context:

ECONOMIC GROWTH

_ For the April-June quarter this year, the economy grew at an annual rate of 1.7 percent. That was the weakest since right after the recession ended in June 2009. In the July-September quarter, analysts think the economy grew at a 2 percent pace. On Friday, the government will issue its first estimate of last quarter's expansion. Growth in the current fourth quarter is expected to amount to a 2.4 percent pace. Next year, the first quarter won't likely be much better. The economy must grow more robustly _ at a roughly 5 percent rate _ to reduce unemployment.

JOBS

_ Unemployment rate: September's rate was 9.6 percent. Economists predict it will rise to 9.7 percent in October and remain there in November. In December, they think it will dip to 9.6 percent. In December 2011, they predict the rate will be 9 percent. The unemployment rate peaked at 10.1 percent in October 2009, a 26-year high.

_ Net job creation: In October, a gain of 45,667 jobs. In November, a gain of 68,048. In December, 87,786. For all of 2011, the economy should add a net total of 1.6 million jobs. That's lower than the 2.1 million economists had forecast three months ago. The recession wiped out 7.3 million jobs. The economy would need to produce a net 200,000 jobs each month for more than three years to recoup those losses.

CONSUMER SPENDING

_ For the current fourth quarter, the economists predict 2.4 percent annual growth in consumer spending. For all of 2011, 2.5 percent. That's historically weak for spending when an economy is recovering from recession. By contrast, consumer spending exceeded 5 percent in 1983, 1984 and 1985, when the economy was rebounding from a deep downturn.

SAVINGS

_ A savings rate of 5.4 percent next year. Last year, Americans saved 5.9 percent of their disposable income. That was the most since 1992.

_ Sixty-five percent of the economists think Americans' rebuilding of their savings will slow the economy at least slightly over the next five years.

INFLATION

_For 2010, a 1.2 percent rise in consumer prices. In 2011, a 1.7 percent increase. Prices rose 2.7 percent in 2009.

STIMULUS

_ About half said the Federal Reserve should embark on a new program to try to energize the economy by buying government bonds. Half said it shouldn't.

_ Two-thirds said Congress shouldn't authorize more stimulus spending to try to invigorate the economy.