Economists Lift US Growth Forecasts, See Fed Higher for Longer

Economists see a stronger US economy into the next year and a smaller rise in unemployment, supporting expectations that the Federal Reserve will keep interest rates higher for longer.

Gross domestic product is expected to advance an annualized 1.8% in the third quarter, nearly quadruple the 0.5% pace projected in July, according to the latest Bloomberg monthly survey of economists. They also see the economy expanding somewhat in the last three months of the year, rather than contracting.

While forecasters are now projecting a stronger economy across the board, consumer spending — which accounts for about two-thirds of GDP — is seen driving momentum as Americans continue to spend at a healthy pace. The Aug. 11-16 survey of economists included 68 responses, and many were submitted before a government report showed retail sales beat estimates in July after upward revisions to the prior two months.

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Aug-19-2023 06:46:22 PM