No big pickup in job growth in 2012, forecasters say
The recent acceleration in hiring may have brightened consumers’ spirits and the recovery’s outlook, but professional forecasters still see just moderate growth ahead for jobs and the economy.
In their latest outlook, forecasters at the National Assn. for Business Economics said they expect job growth to average 170,000 a month this year. That’s up from the 127,000 that the group’s panel projected for 2012 in November.
Even so, if the new forecast to be released Monday pans out, many people are likely to be disappointed.
The economy added 203,000 net new jobs in December and 243,000 last month. That knocked down the unemployment rate to a three-year low of 8.3% and raised hopes that the hiring momentum may be building. The February jobs report comes out March 9.
While 170,000 new jobs a month doesn’t sound bad — the economy added an average 152,000 a month last year — it’s unlikely to be enough to make a dent in the unemployment rate.
More new jobs will be needed than usual to absorb workers reentering the labor market after the devastating recession and sluggish recovery. As such, the bulk of the association’s 45 forecasters see no change in the jobless rate this year.
One reason job growth isn’t likely to sustain the pace of the last two months is that the recent hiring spurt is seen as having been inflated by unseasonably warm weather, said Richard DeKaser, deputy chief economist at the Parthenon Group and an analyst for the association’s survey.
Productivity also is expected to pick up from very low levels in the fourth quarter, he said, meaning employers will be able to satisfy more of the demand for goods and services by increasing output from existing employees and machines.
The panel’s modest job-growth expectations reflected its view that the economy, while growing somewhat faster than in 2011, will nonetheless muddle along this year.
The economists surveyed foresee U.S. gross domestic product, the broadest measure of economic activity, expanding 2.3% this year after growing at a sluggish 1.7% rate in 2011.
Consumer spending will remain subdued, the forecasters said, even as housing construction improves and business spending remains solid.
The outlook, of course, will darken if oil prices keep surging. The survey was conducted in late January and early February, before the sharp run-up in crude — an increase that analysts attribute partly to heightened tensions over Iran.
