Share “Economists forecasting moderate 2013 growth”

Economists forecasting moderate 2013 growth

Published on NewsOK Modified: December 16, 2012 at 11:02 pm •  Published: December 16, 2012
Advertisement

"The panelists believe that once there is greater clarity on budget and tax issues, you will see less uncertainty on the part of businesses and consumers," she said.

The panelists expect housing will once again be a standout performer with residential investment growing at an annual rate of 12 percent next year. Builders are expected to break ground on 930,000 new homes in 2013, up 21 percent from this year, while home prices are expected to increase 3.5 percent, after an expected 3 percent gain this year.

But the panelists look for business investment in equipment and software and structures to slow in 2013. They are also looking for after-tax corporate profits to show an increase of 5 percent, down from an expected 8.5 percent gain in 2012. Both years are below the 10.2 percent average increase over the past 20 years.

Among the other predictions in the latest NABE survey:

—Employers will add an average of 165,000 jobs per month next year, a slight improvement from the 150,000 monthly job average so far this year.

—Inflation will remain modest with the Federal Reserve's preferred inflation gauge rising just 1.8 percent. That is below the Fed's 2 percent target. Oil prices are expected to average $93.20 per barrel in December 2013, only a slight increase from $86.70 currently.

—Longer-term interest rates will rise slightly with a 10-year Treasury note at 2.25 percent at the end of next year, up from 1.70 percent currently. The Federal Reserve is expected to keep short-term rates unchanged at a record low near zero for all of next year.