MBA Upgrades US Growth Forecast in September 2009As was the case in the August 2009 forecast, personal consumption expenditures, residential investment and government consumption and investment are predicted to be the engine of US economic growth in the second half of 2009. Business fixed investment is predicted to start having an increasing contribution to growth in 2010 and become the second fastest growing component of GDP in 2011 expanding at an average annual rate of 11%. In 2010 business fixed investment is predicted to increase at an average annual rate of 4.7%. Residential investment is predicted to be the fastest growing component of GDP in 2011 expanding at average annual rate of 21.3%. In 2010 residential investment is predicted to be expanding at an average annual rate of 13.1%. As was the case in the August 2009 forecast, the job market is predicted to continue to deteriorate and the unemployment rate to continue climbing through the second half of 2009 and peak in the second quarter of 2010 at 10.2%. However, a somewhat faster improvement of the job market is now predicted by MBA for the period following the second quarter of 2010, with the unemployment rate dropping gradually to 8.7% (instead of 9.1% per the August 2009 forecast) by the fourth quarter of 2011. MBA upgraded its US growth forecast also for 2010 and 2011. In particular, now the US economy is predicted to grow at an average annual rate of 2.7% in 2010 and 4.2% in 2011. Note that the August 2009 forecast predicted real GDP growth of 3.4% for 2011.
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