The U.S. economy may end 2011 growing at its fastest clip in 18 months as analysts increase their forecasts for the fourth quarter just a few months after a slowdown raised concern among investors.
Economists at JPMorgan Chase Co. in New York now see gross domestic product rising 3 percent in the final quarter, up from a previous prediction of 2.5 percent. Macroeconomic Advisers in St. Louis increased its forecast to 3.2 percent from 2.9 percent at the start of November, while New York-based Morgan Stanley Co. boosted its outlook to 3.5 percent from 3 percent.
âThe incoming data on consumption, business spending and residential investment all point to GDP growth in the fourth quarter tracking 3.3 percent,â said John Herrmann, senior fixed-income strategist at State Street Global Markets in Boston.
Herrmann, who is the second most-accurate forecaster of GDP based on Bloomberg data, had been looking for fourth quarter growth of 2.4 percent at the start of this month. The economy expanded at an annualized pace of 2.5 percent in the third quarter.
Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York, said he wouldnât be surprised to see fourth-quarter growth of 4 percent,
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