(NBC NEWS) -- They're not exactly singing "Happy Days Are Here Again," but business
economists are feeling a little more upbeat about the recovery and job
market heading into next year, according to a survey of the group
The unemployment rate will continue falling
next year, with the economy adding about 200,000 new jobs a month,
according to the National Association of Business Economics quarterly
survey, which was taken before Friday's surprisingly strong November
That strong pace of hiring should help boost wages,
providing some relief to households struggling to make ends meet.
Hourly wages will close out the year up just 1.8 percent this year,
according to the group. They expect those wage gains will rise to 2.4
percent next year as lower unemployment will put pressure on employers
to spend more to recruit and keep the best workers.
the modest wage gains, the economists expect consumer spending to
remain tight, growing just 2.4 percent next year after rising 1.9
percent in 2013. (Those forecasts are down slightly from the group's
A gradual rise in spending should help keep
the U.S. on a slow but steady path of recovery from the Great
Recession, with the overall economy ending this year 2.1 percent larger
than it was a year earlier. The group expects economic growth to pick
up gradually next year, with gross domestic product expanding by 2.8
percent. (That's a bit slower than the 3 percent gain predicted in the
Government spending cuts won't help. Nearly 90
percent of the economists surveyed expect to see more federal spending
cuts next year, but three-quarters of them think the impact will be
limited to less than a half percentage point of GDP growth.
cuts are having a positive impact on the budget deficit, which shrank
from $1.1 trillion in fiscal 2012 to $680 billion in the fiscal year
that just ended in October. The economists expect the federal deficit
to narrow a bit, to $600 billion, when the current fiscal year ends
That assumes Congress doesn't pull another budget
stunt and shut down the government again, which cost the economy untold
billions in workers' furloughs and cancelled government contracts and
rattled consumer confidence. The group puts the odds of another
shutdown in January-when Congress faces another self-imposed
deadline-at about 20 percent.
The group is also keeping a close
eye on the other major government-related wildcard-the Fed's widely
expected decision to ease up on the money pumps that have been wide
open since the financial collapse of 2008. Fed officials have said they
plan to begin easing up on the flow of fresh cash as the unemployment
rate falls to 6.5 percent.
The business economists group
expects the central bank to begin "tapering" its massive program of
money creation-currently running at about $85 billion a month-sometime
in the first half of next year. About two-thirds of the group thinks
that will happen in the first quarter of 2014.
Investors fear the
Fed's policy shift could throw cold water on stock prices, which have
been on a tear while much of that cash has been flowing into the stock
and housing markets. But the economists expect the market's rally to
continue next year, based on their expectations that corporate profits
will continue to rise, picking up momentum from a 5.0 percent gain in
2013 to a 6.1 percent advance in 2014.
John W. Schoen, CNBC