The U.S. economic recovery will remain at a steady pace, but slow in the face of persistency with high unemployment and debt burdens, according to the National Association for Business Economics Survey.
However, the unemployment rate is expected to rise up to 9.5 percent or higher through early next year. The unemployment rate is expected to ease only slightly to 9.2 percent by the end of 2011 according to www.abcnews.go.com. The hiring process will continue at a slow rate, and the economists predicted that the economy will add 150,000 or fewer jobs each month until the middle of 2011, after which the numbers will improve to 175,000. Only the jobless rate will begin dropping from 9.6 percent to 9.2 percent according to the economists on www.economictimes.Indiatimes.com. A majority of the economists think it will be 2015 or later before the rate falls to a historically normal five percent, according to www.msnbc.msn.com.
The survey was taken between October 21 and November 4, and it is scheduled to be released on Monday. Economists are expecting the growth percentage of this year to be 2.7 percent, up slightly from the previous forecast of 2.6.
The economy will need to add 125,000 new jobs to keep up with the population growth. “Confidence in the expansion’s durability is intact, but panelists remain concerned about high levels of federal debt, a continuing high level of unemployment, increased business regulation, and rising commodity prices,” said Richard Wobbekind, President of NAEB and an associate dean of Leeds school of Business at the University of Colorado in his statement, according to abcnews.go.com.
In essence, the NAEB’s survey is conducted four times per year. It brings together economists who have big-time picture expectations, such as growth in hiring, home prices, and spending. Economists work for industry groups, government agencies, banks, and economic analysis firms. Their biggest concern is the federal deficit. They predicted that the deficit will shrink by only about $100 billion from the $1.2 trillion it is now, a level the NAEB called “extreme.”
Economists told the NAEB that consumer spending is likely to remain low with families spurning in retail stores during the holiday shopping season. “We’re not going to see any irrational exuberance from consumers this year,” said Joel Naroff, President of the Naroff Economic Advisors, according to www.buzzle.com.
The housing market will also struggle, said the economists, according to economic times. Indiatimes.com. Home prices will not rise enough in 2011 to keep up with inflation, and housing stats will remain near record lows. Allen Sinai, chief economist at Decision Economics, noted of the likely stagnation in the housing market. “Our houses are no longer cash machines,” Sinai said, according to www.buzzle.com.
Kasey Doshier, a graphic designer in Chicago, said that the recession taught her to rein in her spending. The key moment came early last year, when her employer cut her pay 15 percent to avoid layoffs. “I just lived paycheck to paycheck and had a good time,” said Doshier, 32, according to msnbc.msn.com. The loss of tax revenue has forced state and local governments to cut services and lay off workers.
Will this economic recovery ever turn around and will unemployment recover in time for more jobs to be created? Also, will the housing market keep falling down since no one can pay their monthly mortgages? Those questions wait to be answered in the coming year.
