Economic recovery is stronger than expectedEconomic recovery in the U.S. appears to be stronger than expected, according to USA Today's quarterly survey of 46 leading economists. The survey also revealed economists believe there is little risk the economy will slip back into a recession.
Seven in 10 economists say they're more optimistic than they were three months ago.
"I think we've gotten to a point where it's a self-sustaining recovery," says Standard & Poor's chief economist David Wyss.
Still, the recovery is expected to fall short of the sharp upturns that often follow severe economic slumps, and the 9.7 percent unemployment rate is expected to fall slowly. Median estimates are for a 9.4 percent jobless rate at the end of this year and 8.5 percent jobless rate at the end of 2011; most economists surveyed say the U.S. won't regain all the jobs lost during the recession until 2013 at the earliest.
However, economists predict 3 percent growth this year compared with 2.8 percent forecast in January, and none see a return to recession by next year.
The economic outlook is more optimistic because of increased consumer spending and retail sales, as well as increased manufacturing to meet growing demand.
Wyss says there are challenges because consumer debt could curb spending sprees, an expiring home buyers' tax credit could dampen housing sales and the federal stimulus package will be gone by late 2010.
However, Dean Maki, chief U.S. economist of Barclays Capital, is more optimistic, saying the stock rally and increased incomes will allow consumers to pay off debt while increasing spending. He also believes homes are inexpensive enough to improve sales even when the home buyers' tax credit expires.
Date : 4/27/2010