ABA economic committee expects lending to grow nearly 3% in 2011

The economic advisory committee to the American Bankers Association believes the economy is on the mend and that lending will pick up 2.7% in 2011 over last year. Chief economists at some of the largest banks in the world including JPMorgan Chase (JPM), Deutsche Bank and Wells Fargo (WFC), convened Thursday to discuss the state of the U.S. economy. PNC Financial (PNC) Chief Economist Stuart Hoffman said the market is weaning itself away from a need for monetary and fiscal stimulus. “Businesses and consumers are feeling more confident about the economy, and job growth will accelerate as layoffs diminish and small business hiring picks up,” Hoffman said. While overall lending is expected to grow nearly 3% this year, Hoffman said loans to small business, often thought of as the largest hirers, will increase 4.3%. “Bank lending is growing and will help finance the economic expansion,” Hoffman said. The committee expects job growth to improve and even accelerate by the end of the year, adding another 2.1 million private-sector jobs, nearly doubling the 1.1 million created in 2010. However, as other forecasts have shown, housing will be left behind, economists said. “Strong exports and capital expenditures will also continue to fuel the expansion, even as weak housing and state and local government financial difficulties restrain the pace of expansion,” the committee said. Hoffman said there are still too many people unemployed and that while the ABA outlook is good news, “even stronger private-sector employment growth is needed if we are to achieve a self-sustaining economic expansion.” Write to Jon Prior. Follow him on Twitter: @JonAPrior