Economists raise forecasts for US growth

Economists are raising their forecasts for US economic growth this year, according to a Bloomberg report.

Surging profits are prompting economists to revise their estimates for growth, tilting the recovery more in the direction of a V-shape as businesses from Intel Corp. to JPMorgan Chase & Co. boost spending.

“Companies have a lot more capital, and they’re going to deploy it for equipment and hiring rather than sit on it, said Joseph LaVorgna, chief U.S. economist in New York at Deutsche Bank Securities Inc. “It’s quite possible the economy produces a recovery significantly stronger than people anticipate.”

The U.S. will grow 4 percent this year, he said. While that’s slower than the V-shaped recovery in 1984, when the economy expanded 7.2 percent after the 1981-82 recession, it’s faster than the 3 percent median estimate of 59 economists surveyed in April by Bloomberg News.

Barclays Capital, a unit of London-based Barclays Plc, raised its forecast for growth this year to 3.8 percent from 3.5 percent on April 16, while UBS Securities, a unit of UBS AG in Zurich, increased its prediction to 3.3 percent from 3 percent on April 9. The economy contracted 2.4 percent in 2009.