The U.S. economy is poised for sustained growth fueled by the private sector after being reliant on low interest rates and fiscal stimulus for the past few years, a bankers group forecast on Friday.
Businesses and consumers are feeling more confident about the economy and job growth will accelerate as layoffs diminish and small business hiring picks up, said Stu Hoffman, acting chairman of the American Bankers Association's economic advisory committee.
He said current conditions are leading to greater willingness by banks to lend to both consumers and businesses, which in turn should help finance continued growth.
Hoffman, also chief economist for PNC Financial Services Group Inc of Pittsburgh, said the bankers expect real growth in national output of 3.3 percent in 2011, ahead of the 2.8 percent rate of expansion on a fourth-quarter-over-fourth basis posted in 2010.
Despite an anticipated acceleration in growth as the year wears on, the ABA still sees the 2011 unemployment rate easing only to 9.4 percent from 9.6 percent this year.
Hoffman said even if 2.1 million new jobs are created this year, as forecast, up from 1.1 million in 2010, it will take only a small bite out of an excessively high jobless rate.
The bankers said that as the 2007-2009 financial crisis recedes, the balance between risks the economy faces on the downside and those on the upside are reaching better balance.
The downside risks include much higher oil prices, state and local government financial woes and sovereign debt problems in Europe. But those are offset by better stock market returns and healthy corporate profits.
In response to questions, he said the bankers were not anticipating the Federal Reserve will begin pushing interest rates higher before 2012.
(Reporting by Glenn Somerville, editing by Dan Grebler)