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Economists see 7.5 percent unemployment by end of 2013

The National Association for Business Economics said the country's "subpar" recovery will continue over the next year and a half. Employment, housing and spending metrics will continue to improve, albeit at a sluggish pace, the group forecasted, with unemployment only ticking down to 8 percent by the end of this year, before falling to 7.5 percent at the end of 2013.

The 54 economists who participated in the survey predicted an average of 188,000 jobs added monthly for 2012, compared to the 170,000 forecasted in NABE's last survey.

This is a considerably brighter outlook than the group's September report, in which surveyed economists predicted an 8.5 unemployment rate at the end of this year. A recovery in housing also appears to be inching forward. NABE revised an earlier projection of no price increases for this year to a positive but meager 0.5 percent increase, followed by a 2 percent increase next year. 

Still, the new survey's modest expectations for the next year and a half show that economists think the nation's financial recovery has a long way to go. 

"Expectations for housing, vehicle sales, employment, and industrial production all improved in the current survey. However, expectations for overall economic growth as measured by inflation-adjusted gross domestic product, business investment, and consumer spending remain below historical norms,” survey chair Shawn DuBravac wrote.

Economists surveyed by NABE projected GDP growth for this year and next year of 2.4 percent and 2.8 percent, respectively. These figures are at the low end of the Federal Reserve's recent estimates last month. The Fed predicted a range of 2.4 percent to 2.9 percent GDP growth for this year, and 2.7 percent to 3.1 percent growth in 2013. 

On the positive side, economists continue to think that inflation and interest rates will remain low through the end of 2013.