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Washington - The fifth anniversary of the U.S. economic expansion will usher in a rare boon: growth exceeding 3 percent over a nine-month period, a Bloomberg survey of economists forecasts.
Gross domestic product will expand 3.1 percent from July through December following a 3.3 percent advance last quarter, according to the median forecast of 74 economists polled from July 3-9. It would be the first time since 2004-05 that GDP has sustained such gains over an extended period.
"We're in an environment where I don't see any major headwind," said Ethan Harris, co-head of global economics research at Bank of America Corp. in New York. "I see minor challenges. So things are aligned for better growth."
Consumers probably will be buoyed by an improving job market and gains in stock prices, economists in the survey said. Business confidence will get a lift from less political brinkmanship, driving investment at the same time state and local government agencies are poised to boost spending. The economic momentum will carry over into 2015, making it the strongest year in a decade, even as the growth rate for all of 2014 is held back by the first-quarter slump, the survey showed.
Bank of America economists see the world's largest economy expanding at a 3 percent pace in the second half of the year. The prospect of fewer government cutbacks, rising motor vehicle demand and more home sales will lead the push, Harris said.
This year's pickup in hiring is among reasons economists are downplaying the 2.9 percent slump in GDP in the first three months of the year, which matched the worst performance during any expansion in the post-World War II era. The 18-month recession ended, and the recovery began, in June 2009.
Employers added 288,000 workers to payrolls in June, boosting the average monthly advance so far in 2014 to almost 231,000. If that pace is sustained, job gains this year would be the best since 1999. The jobless rate dropped last month to an almost six-year low of 6.1 percent.
"The job numbers reinforce our view that the economy's struggles in the first quarter were an anomaly - they were a blip," said Ryan Sweet, a senior economist at Moody's Analytics Inc. in West Chester, Pa., who is among the most accurate forecasters of the unemployment rate over the past two years, according to data compiled by Bloomberg.
Moody's Analytics projects payrolls will grow by 250,000 a month on average in the second half of the year, which "would be a very good sign that the economy is accelerating," said Sweet.