US to grow 3.5% next year, its best since ’04

US to grow 3.5% next year, its best since ’04
The Economic Times, December 29, 2009, Page 19

Timothy R Homan & Bob Willis WASHINGTON

THE US economy next year will turn in its best performance since 2004, as spending perks up and companies increase investment and hiring, said Dean Maki, the most-accurate forecaster in a Bloomberg News survey.

The world’s largest economy will expand 3.5% in 2010, according to Maki, the chief US economist at Barclays Capital in New York. The rebound in stocks and rising incomes will prompt Americans to do what they do best — consume, said Maki, a former economist at the Federal Reserve. Faced with dwindling inventories and growing demand, companies will soon become confident the expansion will be sustained, he said. Household spending “will pick up steam as we move into the second half of 2010,” said Maki. “The overall picture for 2010 will be an economy growing rapidly enough to bring down the unemployment rate” to an average of 9.6%.

Maki, who specialised in researching household finances at the Fed from 1995-2000, said the economic recovery thiss time will be similar to past rebounds. Maki holds a doctorate in economics from Stanford University near Palo Alto, California. —Bloomberg