NABE Panelists Forecast a Gradual Acceleration in Economic Expansion
This is a public summary of the NABE Outlook.
Members can download the full survey here.
“The NABE panel forecasts a gradual acceleration in economic expansion, from a 2.3% rate of growth in inflation-adjusted gross domestic product in the third quarter of 2013 to 3.0% in the spring through the autumn quarters of 2014,” said Dr. Nayantara Hensel, chair of the NABE Outlook Survey. “The panelists suggest that there is an 80% probability that the Federal Reserve will reduce its asset purchase program in 2014 and that there is a 45% probability that the Fed will reduce both the monthly purchases of mortgage-backed securities and Treasurys in 2013. The panelists suggest that Treasury yields are likely to rise, which may be due to the potential that the Fed may reduce asset purchases. Inflation is expected to remain slow and the labor market is expected to show improvement. The panelists estimate that residential investment and housing starts will continue to grow, although home prices, which they estimate will continue to rise in 2013, may grow more slowly in 2014. The panelists also suggest that consumption will continue to grow slowly in 2013 and then expand in 2014. Moreover, they suggest a less optimistic view of nonresidential structures, equipment and software, and net exports. About 46% of the panelists believe that this year’s cuts in federal spending will reduce the growth rate of real GDP for the fourth quarter of 2013 by half a percentage point or less. Finally, the panelists believe that there is only a 10% probability that Greece will break away from the euro in 2013 and a 13% to 18% probability that Ireland, Italy, or Spain will receive a ‘bailout’ package. Moreover, the panelists believe that there is a 70% probability that no current members will leave the eurozone over the next two years.”