Economic Conditions

Economists See Revved-Up Economy Next Year

In case you missed it, the U.S. economy is picking up speed.

That's the view of a panel of business economists, whose latest growth forecast calls for a 3.1 percent advance in U.S. gross domestic product in 2015—up from a 2.2 percent expansion this year.

And the improved job market will continue to push the jobless rate down to 5.4 percent by the end of next year, according to the latest forecast from the National Association for Business Economics (NABE).

The groups' upbeat outlook was bolstered Friday by the government's latest employment data, which showed a surge in employment in November, when nonfarm payrolls jumped by 321,000. The report also boosted the government's previous estimates for job gains in September and October.

Those numbers were reported after the panel of business economists—who advise large U.S. banks and corporations—were surveyed in mid-November. 

Despite the pickup in job growth and overall output, the panel expects inflation will remain tame next year, in part because of the recent slide in oil prices.

While the pace of the U.S. economy's growth is expected to pick up, the economists are less upbeat about the global economy.

Global growth is seen rising 3.4 percent next year, with China slowing to a 7 percent annual pace, Europe expanding by 1.2 percent and Japan eking out 1 percent gain in GDP.

More than half think the world's developed economies have hit a prolonged period of slower growth—or what they call "secular stagnation." Nearly half of those who think this is happening blame the ongoing debt overhang from the Great Recession. Another 20 percent cited tight government spending.

Other reasons cited were a slowdown in technological innovation (8 percent), demographic changes (8 percent), consumer retrenchment following the Great Recession (4 percent) and excess global production capacity (4 percent).

However, 30 percent don't believe growth in the developed world is in a prolonged slowdown.

The group has also pushed back its forecast for a rise in U.S. interest rates. Most believe the Federal Reserve will begin boosting rates sometime in the middle of next year, but nearly half now think that won't happen until the third quarter of 2015.

The NABE also expect rates to rise more slowly—with the federal funds rate hitting 0.75 percent by the end of 2015. That is slightly less than the 0.845 percent forecast in the previous survey in September. Additionally, it trimmed its forecast for yields on 10-year Treasury to 3.2 percent by the end of 2015, down from the 3.5 percent September forecast.

Inflation, spending, other indicators

Among the group's other forecasts:

Inflation: (as measured by the GDP price index) is expected to inch up to a 1.7 percent annual gain from 1.6 percent this year.

Consumer spending: is expected to rebound from a 2.2 percent pace in 2014 to 2.7 percent next year. Car sales will hit 16.8 million units in 2015, up from 16 million this year.

Industrial production: will slow to 3.5 percent next year, after a 4 percent increase in 2014.

Housing: is expected to continue its slow recovery next year, with starts climbing from 920,000 units last year to 1 million units in 2014 (unchanged from September's survey results) and to 1.15 million units next year from 1 million this year. More than a quarter of panelists said the ongoing slowdown in household formation rate is holding back growth, while another quarter cited "excessively tight" mortgage lending standards as the most important cause.

U.S. budget: The group expects continued improvement in the federal deficit, which it sees shrinking to $460 billion next year from $483 billion in fiscal year 2014

Wages: Respondents also expect an improved labor market to produce real wage gains, with hourly compensation rising 2.6 percent next year after this year's 3 percent gain.

Profits: After-tax corporate profits growth is expected to remain strong, rising 6.7 percent next year after expanding by 3.8 percent this year. The group expects that to translate into stock market gains that will propel the S&P 500 index to 2,050 by the end of this year, and 2,167 by the end of 2015.

Trade: The group also expects exports to grow by 5.4 percent next year, up from 3.5 percent in 2014, with the dollar rising only slightly next year. Import growth is expected to accelerate by 4.4 percent in 2015, slower than the September forecast of 5.7 percent.

More from CNBC