WASHINGTON (AP) — U.S. economic growth should accelerate in the second quarter and remain healthy for the rest of this year, according to a forecast by a group of U.S. business economists. Still, growth for the full year will likely come in lower than they previously estimated.
Job growth should remain steady and consumer spending will also likely pick up, a survey by the National Association of Business Economists said Monday. The survey of 47 economists from companies, trade associations and academia was conducted from May 8 to May 21.
The survey also found that economists increasingly agree that the Federal Reserve will end its bond purchase program by the end of this year.
That's partly because economists are optimistic about growth for the rest of this year: They expect it will jump to 3.5 percent in the second quarter and remain above 3 percent for the rest of the year.
But the pickup comes after harsh winter weather caused the nation's gross domestic product to contract 1 percent in the first three months of the year, much worse than analysts had expected. GDP is the broadest measure of an economy's output.
That weak first quarter reading has caused many economists to lower their expectations for 2014 as a whole. The NABE survey found that economists now project growth will be just 2.5 percent this year, down from a forecast of 2.8 percent in March.
The new forecast is still slightly above the annual average growth rate of about 2.2 percent since the recession ended in June 2009 and up from 1.9 percent in 2013. But stronger growth is needed to accelerate hiring and boost wage growth, which has been weak by historical standards.
The NABE's survey is slightly more pessimistic than the Federal Reserve's most recent projections, released in March. The Fed expects growth will be between 2.8 percent and 3 percent this year. The Fed may lower its growth outlook for this year when it releases its next forecasts later this month because of the first quarter's contraction.