Economy Watch: Dismal Scientists Not Quite as Dismal as Before
Gallop predicts that the economy will grow at a better rate in 2011 than what was predicted three months ago, creating about 200,000 jobs each month, which would lower the unemployment rate to 9 percent but no further.
By Dees Stribling, Contributing Editor
Ahead of official U.S. GDP numbers later this week, 46 economists surveyed by USA Today are predicting that the economy will grow at an annualized rate of 3.2 percent to 3.4 percent each quarter of 2011. That forecast represents an uptick in optimism for the economists, who were predicting 2.5 percent to 3.3 percent for the year only three months ago.
If that optimism turns out to be justified, and the U.S. economy does grow that fast this year, that would mean that about 200,000 new jobs will be added each month, according to the survey. Good? Yes, but that many jobs would only be enough to knock the official unemployment rate down to 9 percent, as new workers and former too-discouraged-to-look-for-jobs people joined the ranks of U.S. jobseekers.
The survey also pointed out a number of stumbling blocks ahead for the economy. Energy costs, which have been creeping up all too unpleasantly in recent months, remain a wild card; the for-sale housing market is still a dog’s breakfast; and local and state governments remain highly stressed.
Gallup puts unemployment slightly higher than official rate
The polling specialist Gallup said last week that its latest estimate of U.S. unemployment remained at 9.6 percent in mid-January, the same as at the end of December. That’s a little more than the U.S. Department of Labor’s latest numbers, which were 9.4 percent for December. The new Gallup numbers nevertheless compare favorably with its estimate of 10.6 percent in mid-January 2010.
The company also measured recent underemployment, which it defines as the number of those unemployed and looking for work plus those working part time but wanting full-time work. The improvement in the percentage of part-time workers wanting full-time work and the stability of unemployment rate, in Gallup’s estimation, combined to produce a slight improvement in underemployment to 18.6 percent, down from the 19 percent of December. Underemployment now stands 1.2 percentage points below the 19.8 percent level of mid-January 2010.
The pollster also estimates that some 1.3 million Americans who could be employed have simply given up actively looking for work.
Wall Street turned in another mixed day on Friday, with the Dow Jones Industrial Average up 49.04 points, or 0.41 percent, while the S&P 500 rose 0.24 percent to its highest level since before the Panic of 2008 (and how much higher can it go?). The Nasdaq declined 0.55 percent.