Diving brief:

• TThe U.S. economy will likely grow 2.1% next year, with sustained growth above its expected long-term trend, according to economists surveyed by Wolters Kluwer.
• Economists at firms ranging from Goldman Sachs and Ford Motor to KPMG and Wells Fargo have increased their growth estimates by 0.1 percentage points and see only a 27% chance of a recession over the next 12 months , said Wolters Kluwer.
• “While the consensus still expects a slowdown in coming quarters, it expects a more modest slowdown than expected,” Sandy Batten, senior economist at Haver Analytics, said in a statement in the report. “It no longer forecasts any quarter in which gross domestic product growth will be below trend over the entire forecast horizon.”

Dive overview:

Federal Reserve officials estimate the economy will experience annual growth of 1.8% in the long term, according to their median projection published in September.

Defying recession forecasts, GDP grew at an annual rate of 1.4% in the first quarter, 3% in Q2 and 2.8% in the third quarter, according to the Bureau of Economic Analysis. GDP will likely increase at an annual rate of 2.5% in the fourth quarter, according to the Atlanta Fed.

Economists predict the U.S. economy will finish the year with GDP growth of 2.7 percent, Wolters Kluwer said, noting that in January economists were forecasting only 1.6 percent growth for the year.

“The recent performance of our economy has been remarkably good, by far the best of any major economy in the world,” Chairman Jerome Powell said Thursday.

“Consumer spending growth remained strong, supported by rising disposable income and strong household balance sheets,” he said in a speech in Dallas. “Business investment in equipment and intangible assets has accelerated over the past year. »

Also, “tThe labor market remains in strong condition,” Powell said just hours after the Labor Department reported that applications for unemployment benefits decreased by 4,000 to 217,000 during the week ended November 9, less than expected.

Powell expressed confidence that the central bank can support GDP growth, ensure a healthy labor market and slow inflation to its 2% target through “an appropriate recalibration” of monetary policy.

Policy makers last week cut the benchmark interest rate by a quarter of a percentage point to a range between 4.5% and 4.75%, citing the slowdown in the labor market and progress in slowing inflation towards its target.

Central bank officials, based on their median projections at their September meeting, plan to cut the federal funds rate to 4.4% by December and to 3.4% by the end of next year.

Still, the policy is not on a “preset” path, Powell said. “In considering additional adjustments to the target range for the federal funds rate, we will carefully evaluate incoming data, the evolving outlook, and the balance of risks.”

Furthermore, any further easing is not urgent, he added.

“The economy is not sending any signals that we need to hurry to lower rates,” Powell said. “The strength we are currently seeing in the economy gives us the opportunity to approach our decisions with caution. »