LOS ANGELES, Dec. 5 (Xinhua) -- Gross Domestic Product (DDP) in the United States will grow at less than a 2-percent-annual rate through mid-2013, according to a report released Wednesday by the University of California, Los Angeles (UCLA) Anderson Forecast.
The forecast expects growth to pick up and exceed 3 percent for most of 2014 with housing activity leading the way.
Unemployment is expected to stay close to the current 7.9 percent rate in 2013, but gradually decline to 7.2 percent by the end of 2014.
By the end of the forecast period, inflation is expected to be above the Federal Reserve's 2 percent target, bringing to an end the zero interest rate policy that has been in place since late 2008.
UCLA Anderson forecast senior economist David Shulman looked beyond the "fiscal cliff" and assumed that the executive and legislative branches would reach an agreement before the year's end.
If they don't, according to the Congressional Budget Office, the economy will fall back into recession with unemployment returning to 9 percent late next year, according to Shulman.
Even if a compromise is reached, considering the recent upward revision to the third quarter GDP data, "the near-term outlook for the U.S. economy continues to be characterized by modest growth," Shulman said.
"Specifically, we are forecasting that real GDP will increase at an annual rate of only 0.7 percent in the current quarter and less than 2 percent growth in 2013's first half," he said.
The California report, authored by UCLA Anderson Forecast Senior Economist Jerry Nickelsburg, also checked federal, state and local governments debts.
As of the third quarter of 2012, the outstanding U.S. federal debt is 16.1 trillion dollars, which is 102 percent of nominal U.S. GDP. Some 11.3 trillion dollars of the debt is held by the public, which is 72 percent of U.S. GDP, according to the report.
"While this mounting debt and its rapidly rising ratio over GDP after the Great Recession may be well known, we should note that it is not the only public debt that Americans carry," said the report.
As of the third quarter in 2012, the total outstanding state and local government debt in the U.S. is 3 trillion dollars, which is 19 percent of U.S. GDP.