Business economists more optimistic, see little healthcare law effect

Outbound cargo is moved by American Airlines Cargo at Miami International Airport.
(Walter Michot / MCT)

WASHINGTON -- Economists working for U.S. businesses are more optimistic about growth this year and see little effect from the start of healthcare reform or the reduction in a key Federal Reserve stimulus program, according to survey results released Monday.

More than 40% of respondents in the January survey by the National Assn. for Business Economics said they expected their firms to raise prices in the first three months of the year, the largest percentage since 2012.

But despite the brighter outlook, the pace of hiring is not expected to increase, the survey said.

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“The outlook for 2014 is strengthening” said Jack Kleinhenz, the group’s president and chief economist at Kleinhenz and Associates.

“On net, survey respondents are more optimistic in their economic outlook and, regardless of any changes in monetary policy, expect their firms’ performance in 2014 will be superior to that in 2013,” he said.

A majority of the economists surveyed predicted there would be “little material impact on business conditions” from the implementation of healthcare reform this year or the anticipated reductions in the Fed’s bond-buying program.

Last month, Fed policymakers reduced the central bank’s monthly bond purchases to $75 billion, from $85 billion. Despite a sharp drop in U.S. stocks last week, the Fed is expected to announce another $10-billion reduction on Wednesday.


About 69% of respondents said they expected growth this year ranging from 2.1% to 3%, roughly the same as in the December survey.

But economists were more upbeat because of improving profit margins and sales.

Profit margins increased in the last three months of 2013 for the second straight quarter, and 63% of respondents reporting rising sales at their companies during the Dec. 19-Jan. 6 survey period, the highest level for any monthly survey over the past year.



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