Employment will improve more this year than economists previously estimated, helping the world's largest economy to keep growing, a private survey showed.
Payrolls will rise 188,000 a month on average in 2012, up from a February projection of 170,000, according to the results of a survey by the National Association for Business Economics issued today in Washington. Unemployment will average 8 percent in the fourth quarter, little changed from the three-year low of 8.1 percent reached last month.
The world's largest economy will grow 2.3 percent this year, the same as projected in February, and expand 2.7 percent in 2013. Inflation will probably remain in check, holding around the Federal Reserve's 2 percent through next year, while a still elevated jobless rate limits gains in consumer spending, the survey showed.
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Forecasters "expect moderate growth in the near-term with improvement coming in the post-election year," Shawn DuBravac, chief economist at the Consumer Electronics Association and the survey's chairman, said in a statement. "Expectations for housing, vehicle sales, employment, and industrial production all improved."
Responses in the survey, taken from April 19 through May 2, didn't reflect the results of the latest jobs report that was issued on May 4. Employers added 115,000 workers to payrolls in April, the fewest in six months, and the jobless rate dropped as people left the labor force, according to Labor Department data.
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The job market may accelerate further next year, the survey showed. Payroll gains are forecast to average 200,000 a month in 2013, and the unemployment rate may drop to 7.5 percent in the last three months of that year.
The economists raised their forecast for auto sales this year to 14.5 million from 14 million in the February survey, which would make this the best year since 2007. Demand is projected to climb to 14.8 million in 2013.
Prospects for housing are also looking up. Economists in the latest survey predicted housing starts will climb to 720,000 this year, compared with a February forecast of 700,000. They are projected to jump to 850,000 in 2013, which would be the best year for builders since 2008.
Inflation will probably be contained even as the economy expands. Prices tied to consumer spending and excluding food and fuel, the co-called core personal consumption expenditures index, will increase 2 percent this year and next, the survey showed. While higher than projected in the February survey, the gain is in line with the Fed's long-term forecast for the index including food and fuel.
Fifty-four NABE members responded to the survey. The National Association for Business Economics, founded in 1959, is the professional organization for people who use economics in their work.
Bloomberg News
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