The U.S. economy will recover this year, but growth won’t be strong enough to bring down unemployment substantially, bank economists said Friday.
The American Bankers Association said in a statement the consensus of bank economists is for an annualized GDP growth rate of around 3.1% throughout 2010. They see core inflation, which excludes volatile food and energy prices and is closely watched by the Federal Reserve Board, at 1.2%.
“This growth would be just above the economy’s long-term trend, but not enough to reduce the unemployment rate much below 10% by year end,” the group said.
The U.S. economy is emerging from its worst recession in decades. The jobless rate held at 10% in December 2009 as employers cut more jobs than expected. Bank economists expect low inflation will allow the Federal Reserve to hold short-term rates at a record low near zero during the first half of this year.