The Labor & Employment Blog is a forum for practitioners and Bloomberg BNA editors to share ideas, raise issues, and network with colleagues.
Wednesday, July 17, 2013
by Robert Combs
Bloomberg BNA recently asked 19 prominent economists to predict the near future of the U.S. economy, and their responses were remarkably similar about employment. Job growth, they predicted, will continue to help strengthen the economy through the end of this year and well into the next.
The economists, who completed BBNA's midyear economic outlook survey June 5-17, forecast an average unemployment rate of 7.5 percent unemployment for the remainder of 2013, followed by a dip to 7.0 percent for 2014.
Some prognosticators are going even lower. “We're expecting unemployment below 6.5 percent in the fourth quarter of next year,” said Brett Ryan at Deutsche Bank Securities.
The expected slide in unemployment won’t necessarily coincide with a robust boost in the employment ranks. The consensus prediction for average monthly employment gains of 167,000 jobs per month in the second half of this year is less than the 187,000 jobs per month added on average in the first five months of the year. But the outlook for the first half of 2014 is for a rebound to 190,000 jobs per month.
“We still don't forecast the large employment gains we've seen in past recoveries,” said Ken Matheny of Macroeconomic Advisers LLC. “We don't have anything remotely like” the 300,000 to 400,000 jobs per month that the economy added at times during the recovery from the last severe recession in the early 1980s.
“There's a virtuous cycle we'd like to kick off,” Matheny said. On the one hand, “you need confidence on the part of businesses so they're willing to hire,” and on the other, consumers need to see better job growth to become more willing to spend. Right now that process of mutual reinforcement “is working at a pretty sedate pace,” he added.
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