US ECONOMY Predicted to Grow by more than 2.5%

US economy predicted to grow faster than 2.5% in Q4 2009, according to the November 2009 forecast issued by the Mortgage Bankers Association (MBA).

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In particular, the MBA forecast predicts that US real GDP will grow by an annualized rate of 2.5% in the fourth quarter of 2009 following an increase of 3.5% in the third quarter. This will bring the annual GDP growth rate for 2009 to -0.3%.

Growth in the fourth quarter will be driven by increasing residential investment, consumption expenditures and government investment. Business fixed investment will decline by 0.9%.

The US inflation rate is predicted to decrease from 3.6% in Q3 2009 to 2.3% in Q4 bringing the annual average for 2009 to 1.2%. In 2010 inflation is predicted to average also 1.2% but drop to 0.8% in 2011.

The unemployment rate is predicted to increase from 9.6% in Q3 2009 to 10.2% in Q4 2009 and peak at 10.3% in Q1 2010. After that it is predicted to gradually decline to 10% by the fourth quarter of 2010 and to 9.2% by the fourth quarter of 2011.

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