November 4, 2010
November 4, 2010
Poll: Economists, Businesses and Home Owners Still Pessimistic about the Economy
By Oregon Tax News
Economists: The National Association of Business Economics (NABE) recently released a survey by top economists forecasting that the economy will grow at a slower pace than expected over the next couple of years. The 46 economists polled based their analysis on the recent decline in economic data over recent months. The economists reduced their forecast for annual economic growth from 3.2 percent in May, to 2.6 percent in 2010 and 2011.
Experts blame the slower economic recovery on the persistently high unemployment, weak consumer spending and stagnant wages. Although economists expect job creation through the end of 2011, they do not believe that the economy can create enough jobs to decrease the unemployment rate below 9.2 percent. The survey also reported that consumer spending, which accounts for 70 percent of economic activity, to remain low.
The government recently estimated that the national economy grew at a 1.7 percent in the second quarter, which down from the 3.7 percent growth rate logged in the January-March quarter this year. Most economists expect growth to be similarly weak in the July-September quarter, with estimates ranging between 1.5 and 2 percent.
Businesses: A bipartisan poll from the U.S. Chamber of Commerce shows that small business owners are more pessimistic about the economy than average the voter. The poll shows that 78 percent of small business respondents expect the economy to remain stagnant or worsen over the next year. Only sixty-four percent of voters agreed with that assessment, according to an NBC/Wall Street Journal poll. In addition, 32 percent of business owners reported that they are not confident in the future of their companies.
Home Owners: The housing market is another factor dragging down the economy. Economists do not expect housing prices to rise enough in 2011 to keep up with inflation, which will cause home sales to remain near record lows. A national survey by FindLaw.com reported that sixty-three percent of American adults say they are less likely to buy a house because of the current state of the economy.
The trail to economic recovery continues.