{mosads}On unemployment, the group expects a “significantly elevated” jobless rate to be the norm through 2012. The average rate in 2011 is expected to be 8.9 percent, which will decline to 8.2 percent in 2012.
The group’s survey was conducted from June 27 to July 6, ending days before a dismal jobs report found the economy added just 18,000 jobs in June as the unemployment rate climbed to 9.2 percent.
Any deal to raise the debt limit must improve the projected path of federal deficits to avoid negative economic consequences, the group said. And in an echo of the president’s position, the group dismissed any short-term fixes as negative for the economy.
Eighty-five percent of those surveyed said there would be “extremely negative” consequences if the U.S. were to default on its debt.
A similar majority is down on the impact of the Dodd-Frank financial reform law on the availability and cost of credit in the future. More than 75 percent expected the Wall Street overhaul to have a negative impact on credit availability, with another 60 percent expecting it to be bad for the cost of credit.
SIFMA’s downgrade comes after the Federal Reserve similarly lowered economic expectations in June. At the last meeting of the Federal Open Market Committee, the Fed downgraded its growth expectations to between 2.7 percent and 2.9 percent in 2011. It previously expected the economy to grow between 3.1 percent and 3.3 percent this year, when the group last met in April.