WASHINGTON (AP) — U.S. business economists have sharply cut their growth forecasts for the April-to-June quarter and the full year. Yet they remain optimistic that the economy will rebound from a dismal first quarter.
A survey by the National Association of Business Economics finds that economists, on average, expect growth of 3 percent at an annual rate in the second quarter. That's down from 3.5 percent in a June survey.
They project that growth in 2014 as a whole will be just 1.6 percent, sharply below their previous forecast of 2.5 percent. The downgrade largely reflects the sharp contraction in the first quarter, when the economy shrank 2.9 percent at an annual rate.
That was the biggest drop in five years, but analysts put most of the blame on the harsh winter weather and other temporary factors.
The economists reduced their second-quarter forecast largely because they now think consumers spent at a more modest pace than previously predicted. But they are mostly optimistic about the rest of this year.
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