AP survey: Economists see no stock market bubble

WASHINGTON (AP) — A new survey says the overall uptick in the stock market since November is not a Federal Reserve generated bubble.

Three-quarters of the economists surveyed by The Associated Press say stocks are not overvalued. That possibility has touched off nervous debate among the experts. Many point to strong corporate profits as justifying the surge in stock prices.

The economists expect many consumers to respond to their increased stock wealth by spending more. Higher spending would help sustain and perhaps accelerate growth.

The economists think growth is slowing to around a 2 percent annual rate in the April-June quarter from a 2.4 percent rate last quarter. The key reasons are federal spending cuts, higher taxes and economic weakness in Europe and elsewhere.

But they say U.S. economic growth should increase in the second half of this year and speed up next year.

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