WASHINGTON — The recovery that began last year will be stronger than previously estimated, according to a survey by the National Association for Business Economics.
The U.S. economy, the world's largest, will expand 3.2 percent this year and next, according to the poll taken from April 27 to May 7. In February, the group projected growth of 3.1 percent for 2010 and 2011. Economists surveyed also boosted their projections for payrolls and consumer spending this year.
The outlook brightened even as concern over the European debt crisis mounted. Barely less than half, 49 percent, of those polled said Greece will default, either within a year or after some short-term maneuvering bought the country extra time.
The survey was conducted before European policymakers announced a $1 trillion loan package to support debt-laden governments.
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"Although risks involving Europe have recently escalated, the outlook in this country has improved in most respects," NABE president Lynn Reaser, chief economist at Point Loma Nazarene University in San Diego, said in a statement.
"Growth prospects are stronger, unemployment and inflation are lower, and worries related to consumer retrenchment and domestic financial headwinds have diminished," Reaser said.
The rebound from the worst recession in decades started in June 2009, the survey showed — even though the panel responsible for deciding when recessions begin and end said last month that it was too soon to declare the slump that began in December 2007 over.
Consumer spending adjusted for inflation will expand 2.6 percent, up from 2.2 percent projected in February.
One reason for the increased spending expectations is a projection that Americans will save less. Economists surveyed by NABE estimated the savings rate will average 3.4 percent this year, down from the 4.6 percent projected three months ago.
Gains in business investment will be another boost to the economy. Inventory restocking after a record drawdown in 2009 will last over the next two years, and higher earnings will propel spending on equipment and software, the economists said.
Corporate profits will rise by 20 percent in 2010 and 7 percent next year, according to the survey. Payrolls will climb by 120,000 a month on average in 2010.