Economists more upbeat about US prospects this year

NEW YORK • Business economists are growing more upbeat about the United States economy's prospects this year, with a greater share anticipating 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-on-year growth of at least 3 per cent by the end of this year, 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," said NABE president Manuel Balmaseda.

The Jan 4-12 survey took place as lawmakers were expected to begin a new round of stimulus talks aimed at helping to 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.

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 that sales at their firms increased.

The number of businesses expecting to raise their prices rose as well, to 35 per cent from 26 per cent.

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

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A version of this article appeared in the print edition of The Straits Times on January 27, 2021, with the headline 'Economists more upbeat about US prospects this year'. Subscribe