WASHINGTON – Consumer spending is likely to pick up this year, while government spending declines at a faster rate, according to a survey of business economists.
The economists predict that the U.S. economy will grow 2.4 percent this year and 3 percent next year. Thats unchanged from their forecast in February.
But they are more bullish on consumer spending and housing than they were three months ago, in part because of a more positive view about unemployment.
The survey was released Monday by the National Association for Business Economics, which periodically surveys economists for banks, manufacturers and universities.
The 49 economists who were questioned between April 16 and April 30 predicted that consumer spending will rise 2.3 percent this year, up from a forecast of 1.9 percent in February. They were also more upbeat about auto sales, predicting 15.4 million vehicles sales, an increase of 1 million over 2012.
Nayantara Hensel, chair of the NABE survey and a professor at National Defense University, said consumer spending will get a boost from gains in the stock market, home values and lower unemployment.
Home prices are going up, and with also the improvement in the unemployment rate, people will be more willing to buy, Hensel said in an interview.
The economists predicted that home prices will rise 4.4 percent this year and 4 percent next year. Boosted by new construction, they predict a 15 percent jump in residential housing investment this year.