AP reported that a new economic forecast calls for the US economy to make some modest growth strides this year, but not quite enough to significantly reduce the number of jobless Americans looking for work.
About two thirds of the economists who participated in the latest National Association for Business Economics survey expect the nation's gross domestic product, or GDP, to grow at a rate above 2% in 2012.
GDP reflects the economy's total output of goods and services. The latest forecast is in line with one issued by the group in November that called for the economy to grow 2.4% in 2012.
Dr Nayantara Hensel, professor of industry and business at National Defense University and chair of the NABE survey, said that "That is not the sort of GDP growth that's really going to dramatically improve our labor market, but it's certainly not going to make it worse."
GDP growth needs to be above 3% to significantly lower unemployment, which is at its lowest rate in nearly three years, but remains at a troubling 8.5%.
The NABE economists previously forecast growth of 1.8% for all of 2011. The recent improvement in the unemployment rate, a pickup in retail sales during the holiday season, and hopefulness that Congress will be able to reach a debt reduction deal, are among the factors behind the rosier GDP outlook among better than 60% of the survey respondents.
Almost two thirds of respondents said they expect no change in employment, the highest share of survey participants to hold that view in recent quarters. And the share of those who expect hiring to pick up in the next six months declined to 27% from 29% in the previous survey.
That doesn't bode well for new job growth, but it also suggests employers don't expect to slash payrolls further. A majority of the respondents said wages and salaries are unchanged, while nearly all expect either no change in prices or increases by their companies of 5% or less.
Dr Hensel said that the holding pattern on prices could reflect a caution on the part of businesses due to uncertainty in the economy, given the burgeoning debt crisis in Europe, rising tensions with Iran and the potential for higher oil prices.
On the sales front, about 81% of the survey participants, which include some company managers, said sales were either unchanged or rising along with profit margins. But 19% said sales were falling.
Some 63% of the NABE forecasters on the panel expect that there will be no impact from the European debt crisis on sales over the next six months. While about 29% reported sales fell 10% or less due to the region's lingering debt woes.
The survey was conducted between December 15th 2011 and January 5th 2012. It is derived from responses given by 63 NABE members
(Sourced from Associated Press)
