U.S. economy expected to remain weak in 2011, poll finds

The U.S. economy is expected to remain weak in 2011, according to a survey by the National Association of Business Economists (NABE). Real gross domestic product (GDP) is expected to expand 2.6% next year.

Of business economists polled, 40% say the expansion is “sub-par with severe wealth losses and onerous debt burdens inhibiting spending and lending.” That compares with 28% who feel that “the economy will overcome its headwinds, and behave more in line with a traditional business cycle expansion: real output will grow at a rate above potential, and households and businesses will boost discretionary spending.”

Because of weak jobs growth, high unemployment, and little increase in household net worth, consumer spending isn’t expected to increase much. Holiday retail sales are only expected to increase 2.5% this year. Also, half those polled by NABE expect the personal savings rate to fall. The rest of those polled are split over whether the savings rate will rise or fall.

Regardless of where the economy is heading, saving more money now can be a hedge against future financial challenges. Whether you believe that you may be downsized out of a job or face other financial challenges, it’s a good idea to put as much money as possible into a savings account that gives easy access to your funds no matter what happens with the economy.

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