US Outlook December 2013 by NABE

by Eduardo Petazze
The December 2013 NABE Outlook presents the consensus of macroeconomic forecasts from a panel of 51 professional forecasters The survey, covering the outlook for 2013 and 2014, was conducted Novem er !"1#, 2013$ %ounded in 1#5#, the National Association for Business Economics is the professional association for those who use economics in their work$ N&'( has over 2,300 mem ers and 3# chapters nationwide$

Summary
Economists participating in the December 2013 NABE Outlook Surve e!pect the pace o" economic gro#th to accelerate in both 2013 an$ 201%&' sai$ Surve (hair )imoth *ill& $eput chie" economist at the National Electrical +anu"acturers Association, -hile the "e$eral government shut$o#n is likel to #eigh on gro#th in the "ourth .uarter o" 2013& the econom poste$ a surprisingl strong thir$/.uarter per"ormance, (onse.uentl & the me$ian "orecast o" the panel is "or annual economic gro#th in 2013 to a$vance at a 2,10 pace1higher than e!pectations reporte$ in the September surve , 2ooking ahea$ to ne!t ear& panelists "orecast real *D3 gro#th o" 2,40 in 201%& $o#n slightl "rom the 30 gain e!pecte$ in September, )he 5,S, econom is likel to e!perience some hea$#in$s in 201%, +ost panelists believe that the 6e$eral 7eserve #ill begin to rein in its polic o" .uantitative easing in the "irst hal" o" 201%& an$ that a$$itional se.uestration cuts #ill negativel a""ect economic gro#th throughout the ear, 8o#ever& surve results re"lect the vie# that another government shut$o#n or a $e"ault on "e$eral obligations earl in 201% is unlikel , (onsistent #ith a soli$ pace o" output gro#th& non"arm pa rolls are e!pecte$ to increase b nearl 200&000 per month ne!t ear& #ith the unemplo ment rate "alling to an average o" 90, 6orecasts "or several ma:or components o" *D3 have been shave$ since the September surve & et most are still e!pecte$ to post improve$ gro#th in 201% relative to 2013, -hile prices are e!pecte$ to a$vance at higher rates in 201%& in"lationar pressures are e!pecte$ to remain containe$,'

Hig lig ts
)eal *+, is e-pected to e-pand at a slightly higher rate in 2013 than previously forecast, and to accelerate in 2014$ The panel e-pects a 2$1. real *+, growth rate/measured from the fourth 0uarter of 2012 to the fourth 0uarter of 2013$ That result is an increase from the consensus *+, growth forecast of 1$#. in the 1eptem er survey$ The growth rate is e-pected to increase to 2$!. in 2014 2344345, slightly lower than the 3. rate predicted in the previous survey$ )eal *+, grew 1$6. in 2012$ ,anelists anticipate real *+, growth to accelerate steadily from a 1$!. annual rate in the fourth 0uarter of 2013 to 3. in the fourth 0uarter of 2014$ The medians of the five lowest and five highest individual forecasts for 2014 are 1$#. and 4$0., respectively$ 7a or markets are pro8ected to improve$ Nonfarm payrolls are forecast to post an average monthly gain of 166,500 for all of 2013, less than the 1!3,000 recorded in 2012 and elow the 1!#,000 predicted in the 1eptem er survey$ 9owever, panelists anticipate stronger 8o creation in 2014, with an average monthly nonfarm payroll increase of 1#6,000$ The unemployment rate is e-pected to average 6$5. in 2013 and decline to 6$0. in 2014$ &fforda le :are &ct provisions are e-pected to trim 10,000 from monthly payroll growth in 2014$ Tighter fiscal policy is playing a role in lowering the e-pectations for near"term economic growth$ Three"0uarters of the panelists elieve ;cto er<s partial shutdown of the federal government will have a negative impact on fourth 0uarter 2013 real *+, growth$ (ven so, most e-pect the impact to e modest, with 63. predicting a loss of less than 0$5 percentage points of growth$ =eanwhile, !!. of panelists predict additional se0uestration cuts of some form will take effect in 2014, ut 6>. e-pect the negative impact will e limited to less than 0$5 percentage points of real *+, growth$ NABE Sur$eys )eal *+, 43443 Nonfarm (mployment, average monthly change, thousands Also see? NABE !t e US" Outlook Se#tember 2013 2012 2013 201% &ay'13 Se#'13 Dec'13 &ay'13 Se#'13 Dec'13 2$0. 2$4. 1$#. 2$1. 3$0. 3$0. 2$!. 1!3$0 1>!$0 1!#$0 166$5 1#!$0 1##$0 1#6$0