Economists grow more upbeat about US economy, survey says

NEW YORK (BLOOMBERG) – Business economists are growing more upbeat about the US economy’s prospects this year, while a greater share anticipate stronger sales and more hiring over the next three months.

Nearly 70 per cent of respondents in a survey by the National Association for Business Economics (NABE) expect year-over-year growth of at least 3 per cent by the end of 2021, up from 59 per cent in the October survey.

Some 47 per cent see rising sales in the next three months, the most since the first quarter of 2019, while a measure of their hiring expectations was the strongest since the second quarter of 2019.

“Momentum has continued to build, and survey respondents seem much more positive about the future today than in October,” Manuel Balmaseda, president of the NABE, said in a statement.

The survey, conducted Jan 4-12, comes as lawmakers are expected to begin a new round of stimulus talks aimed at helping sustain a fragile economic recovery. While some parts of the economy are booming, including real estate and manufacturing, high unemployment persists and consumer spending has decelerated amid a surge in virus infections.

Some 30 per cent of businesses saw their profit margins rise in the fourth quarter, with the biggest jump among goods-producers, according to the report. Just over half of respondents reported sales at their firms increased and fewer saw declines.

The number of businesses expecting to raise their prices increased as well, to 35 per cent from 26 per cent, the survey found.

Businesses continue to make changes to employment and wages due to the virus, with over a third of respondents citing cutting headcount as one of them.

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