A new survey of economists suggests unemployment is likely to remain right where it is over the next year, stalling at the current level of 7.8 percent through the fourth quarter of 2013.
The widely watched National Association for Business Economics Outlook, a survey of 44 professional forecasters, says job growth next year is expected to average 155,000 per month, a modest figure that barely keeps pace with population growth and will not significantly impact unemployment.
The Outlook expects GDP growth to rise a paltry 1.9 percent this year and only 2.4 percent next year, with levels approaching normal – albeit unremarkable – growth of 3 percent only by the end of 2013.
The forecasters expect litte change in the federal deficit, saying it will remain close to the $1 trillion mark at $950 billion in 2013.
The forecast is based on polling done Sept. 14-16, before the September drop in unemployment from 8.1 percent to 7.8 percent was announced Oct. 5. Since the economists were looking at long term trends, the forecast provides further evidence that the September decline was a statistical anomaly that does not suggest dramatic gains in employment are on the way.
The Outlook indicates President Obama’s economic policies continue to do little to revive the economy, which normally bursts out of a recession with high growth rates – something that hasn’t happened in the current recovery. The forecast says that things will start to improve, but very slowly.
The White House says the economy is more difficult to fix than after previous recessions because of the unique circumstances surrounding a financial collapse.