Leading economists predict slower economic recovery in the US.
By Raif Karerat
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A new survey of leading economists by the Associated Press indicates most now foresee a slower recovery and expansion than previously expected.
“A majority of the nearly three dozen who responded to the survey predict tepid economic growth, weak pay gains and modest hiring for the next two years at least,” reported the AP.
Nearly 70 percent said they thought the economy’s growth would remain below its long-run average of 3 percent annually through 2017. The economy hasn’t attained such a rate of expansion more than a decade.
“We no longer have reason for optimism that the economy is going to accelerate,” said Mike Englund, chief economist at Action Economics. “The real question is, when is the next downturn coming?”
other predictions from the survey show that home sales will improve, the Federal Reserve will raise the short-term rate it controls by the end of the year, and that the average 30-year fixed mortgage rate will rise from 3.9 percent to 4.4 percent by mid-2016 and 4.8 percent by the end of 2016. Those levels are still low by historical standards.
The survey also predicts China’s economic woes will continue to worsen, which will in turn slow the global economy.
The economists cited several reasons for their dimmer outlook for the United States. Many pointed to a slowdown in the proportion of Americans with jobs.
Increases in worker efficiency have also faltered since the recession, further limiting the economy’s output, according to AP research.
“The slowdown in labor force growth is the main reason (economic) growth in the U.S. will be slower than it was in the second half of the previous century,” said Luke Tilley, chief economist at Wilmington Trust.