February 27, 2012
The economic forecast for 2012 is somewhat positive, but lukewarm, according to recent predictions coming out of a National Association of Business Economics survey.
While the U.S. gross domestic product is expected to grow by 2.4 percent in 2012 (with some of that predicted to be more marked in the second half of the year), job growth is just expected to increase slightly. While any growth can be considered good news, this job growth may not be sufficient enough to have much impact on current unemployment numbers, noted the Los Angeles Times.
The NABE predicted job increases to average about 170,000 a month for 2012: that is higher than the 127,000 that was predicted back in November as well as higher than the average 152,000 jobs added on a monthly average last year.
The resulting drop in unemployment numbers due to these job increases could be reflected in an unemployment rate of 8.3 percent. Some 45 economists participated in the NABE survey, according to the The Journal of Commerce. Some of their other predictions, according to MarketWatch, include: a start in the housing recovery, real residential investment improving, and rising spending growth by businesses. In fact, these predictions could have a real effect in the latter-half of 2012.
"Forecast uncertainty among the economists appears to have diminished slightly over the last several months," Gene Huang, NABE president, said in a statement that was quoted by Bloomberg Businessweek.
Yet, on the downside, remains the prediction that consumer spending is expected to be slow. It's forecast to reach a 2.3 percent increase this year: that compares with 2.1 percent last year. However, historically speaking the average comes in at 2.8 percent, according to The Journal of Commerce.
A separate report by the Manufacturers Alliance for Productivity and Innovation also indicates that the GDP will increase in 2012, reported The Journal of Commerce. However, its estimate comes in at 2.2 percent (0.2 less than that from the National Association of Business Economics). It also predicts GDP expansion of 2.4 percent in 2013. While there is no explanation for the small difference in predictions, some of it could be explained by the varying factors in the market. Overall, however, slight optimism seems to be the rule.
"There is a pent-up demand for consumer durable goods, especially motor vehicles," Daniel Meckstroth, MAPI chief economist, told the The Journal of Commerce. "In addition, business investment is improving, and not just for repair and replacement of equipment - there is also investment in expanding capacity."
In fact, MAPI's predictions show that the manufacturing industry could outrank the entire economy overall when it comes to growth. It predicts that manufacturing production will grow by 4 percent in 2012 and 3.6 in 2013.
Compiled by Maggie O'Neill
"Jobs Outlook in U.S. Improves for 2012, Business Economists Say," businessweek.com, February 27, 2012, Shobhana Chandra and Timothy Homan
"NABE: U.S. Economy To Grow at 2.4% Rate in 2012," marketwatch.com, February 27, 2012, Mike Maynard
"No Big Pickup in Job Growth in 2012, Forecasters Say," latimes.com, February 26, 2012, Don Lee
"U.S. Economists Expect 2.4 Percent Growth in 2012," joc.com, February 27, 2012, Joseph Bonney