Pace of economic growth seen waning into 2012: Reuters poll

Wed Nov 9, 2011 10:23am EST
 
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By Leah Schnurr

NEW YORK (Reuters) - An acceleration in the pace of U.S. economic growth in the second half of this year is expected to ebb as 2012 gets underway, although the odds of another recession have receded to one-in-four, a Reuters poll showed on Wednesday.

Encouraged by a recent pick-up in economic data, the consensus from more than 60 respondents showed a better view on the final three months of the year and 2011 overall.

But the pace of is expected to wane from an annualized 2.5 percent in the third quarter, and growth is not expected to get back to that rate again until the final quarter of next year.

More fiscal restraint, uncertainty surrounding the euro zone sovereign debt crisis and lackluster consumer sentiment and spending are all seen taking some of the steam out of growth early next year.

"We have positive momentum to carry us through to the early part of next year, but the headwinds are still going to cap the pace of growth," said Scott Brown, chief economist at Raymond James.

Apart from a raging euro zone sovereign debt crisis that has a chokehold on global financial markets and that is now gripping Italy, uncertainty over U.S. fiscal policy also clouds the outlook for the start of 2012.

A payroll tax holiday and federal unemployment benefit program are set to expire, while a special committee of lawmakers is meeting to reach a deal on reducing the federal deficit.

"There are a number of things coming together with regards to fiscal policy that makes early next year look very iffy," said Mark Zandi, chief economist at Moody's Analytics.   Continued...