WASHINGTON -- Economic growth will remain slow over the next year but the risk of a recession is low, according to a survey of 48 economists.
The unemployment rate, which surprisingly dropped sharply to 7.8% in September, won’t fall any further until after the middle of next year, according to the survey by the Wall Street Journal. The rate will still be 7.8% in June 2013, and will drop to 7.6% in December 2013, it said.
The economy will add an average of 147,000 jobs a month through 2013, just about enough to keep up with the growth of the labor force, according to the survey released Friday.
The economy will grow at an annualized rate of less than 2% through the first quarter of next year, before the pace picks up somewhat, according to the survey. The average projection of growth in the fourth quarter of 2013 is 2.6%.
The economists put the risk of a recession in the next year at 22%. They said there is a greater chance -- 28% -- that economic growth will pick up to above 3% in 2013.
The economists were optimistic that political leaders in Washington would find a way to resolve the looming fiscal cliff -- large tax increases and government spending cuts that kick in starting in January. Many analysts fear that combination will lead to a recession in the first half of 2013.
But the economists surveyed put the best odds on Congress and the White House delaying the fiscal cliff, with lesser odds on a long-term resolution to the deficit problems.
Such a long-term deal is just as likely if President Obama wins reelection as it is if Republican Mitt Romney is victorious in November, the survey said. The economists said there was a 45% chance of a comprehensive deficit-reduction deal under either scenario.
US Real GDP Growth data by YCharts