A group of U.S. business economists boosted their forecast for economic growth over the next year, but said the jobless rate will remain stubbornly high, a survey released on Monday showed.

The National Association for Business Economists predicted real growth in gross domestic product for 2010 would be 2.9 percent, up from its October forecast for 2.6 percent growth.

Real GDP growth should also be enough to recover losses from the recession and return output to an all-time high by the end of 2010, the business group said in a statement.

For all of 2009, the business group predicted the economy would contract by 2.4 percent, slightly improved from its October forecast for contraction of 2.5 percent.

The survey reflected a poll of 48 NABE members from October 24-November 5.

The group saw the jobless rate holding at an average 10 percent from the fourth quarter of 2009 to the second quarter of 2010 before dropping to 9.6 percent by the end of 2010.

While the recovery has been jobless so far, that should soon change, said NABE President Lynn Reaser. Within the next few months, companies should be adding instead of cutting jobs.

Employers have shed 7.3 million jobs since December 2007 when the recession began; the jobless rate last month jumped to 10.2 percent, a 26-1/2 year high.

The survey found that most of the group's economists were mostly optimistic that the Federal Reserve's polices will not lead to higher inflation, NABE said.

The panel expects the core personal consumption expenditures deflator to rise 1.5 percent in 2010, following an identical gain in 2009.

Inflation will remain low mostly because of substantial labor slack and further productivity gains will reduce labor costs, the business group said.

Government spending will likely grow at a 2 percent pace in 2010 because of fiscal stress at the state and local levels, the survey showed.

The personal saving rate is expected to average 4 percent in 2010, the highest rate since 1998, the group said.

(Reporting by Nancy Waitz; Editing by Leslie Adler)

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