The American economy should avoid recession and begin to pick up by year-end, according to the National Association of Business Economics’ quarterly survey of 31 leading economists.

Blaming the current slowdown on the soft tech sector, the NABE survey predicted that strong consumption should trigger a recovery. It added that buoyant consumer spending could largely be attributed to the seven interest rate cuts so far this year by the Federal Reserve. A further rate reduction is expected next month.

“Though the NABE outlook panel continues to revise down its forecast for economic growth in 2002 and the remainder of this year, two-thirds of the panellists expect an economic recovery to begin before year-end,” commented Harvey Rosenblum, senior vp at the Federal Reserve Bank of Dallas.

“Furthermore, the panel’s forecast sees no recession – more specifically, no quarter with negative GDP growth over the forecast horizon.”

News source: Financial Times