Survey: U.S. to see 3 percent growth in 2011

By Reuters
Posted Dec. 6, 2010 at 4:52 p.m.

U.S. economic growth and inflation is expected to pick up a bit next year, while the jobless situation will improve slightly, according to a survey conducted by the Federal Reserve Bank of Chicago.

U.S. real gross domestic product is forecast to grow 3 percent next year, up from an expected 2.4 percent pace this year, according to a survey of 30 business leaders and academics participating in the Chicago Fed’s Economic Outlook Symposium on December 3.

Inflation, as measured by the consumer price index, is expected to edge up to 1.6 percent from 0.9 percent this year, survey participants said. Unemployment, which rose to 9.8 percent in November, is seen at a “still quite high” 9.2 percent by the end of next year.

Despite the slightly rosier picture for 2011, the outlook appears to give further support to the Fed’s recent controversial decision to buy another $600 billion in Treasury securities to help boost the economy.

Both inflation and employment are seen at levels that fall well short of those the Fed sees as consistent with its mandates. That is despite the fact that survey participants were more optimistic than the consensus among private economists, who see 2.5 percent growth next year, according to the most recent Blue Chip Economic Indicators survey.

Chicago Fed President Charles Evans has been one of the most vocal supporters of the U.S. central bank’s decision to provide new stimulus. The move drew criticism from politicians at home and abroad, with U.S. trade partners particularly concerned that a weaker U.S. dollar would hurt their exports.

The trade-weighted U.S. dollar is expected to be unchanged next year, according to the Chicago Fed survey.

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