The National Association for Business Economists (NABE) is optimistic that the economy will recover next year and that the unemployment rate will drop in 2010.
“While the recovery has been jobless so far, that should soon change. Within the next few months, companies should be adding instead of cutting jobs,” said NABE President Lynn Reaser, who is also the chief economist at Point Loma Nazarene University.
Economists think that unemployment will bottom in the first quarter of next year. For 2010, they project economic growth of 3.2 percent and an unemployment rate of 9.6 percent in the fourth quarter of the year.
These estimates actually present a fairly pessimistic outlook on the economy.
A growth rate of 3.2 percent is very low for the start of an economic recovery. Larry Kudlow, CEO, Kudlow & Co. has found that the average real GDP growth rate for the first quarter of the 10 post-war recoveries is 7.3 percent.
The soon-to-be revised growth of 3.5 percent in the third quarter of this year already puts us on course for a below average recovery.
Nevertheless, the economists are predicting robust jobs growth. Using historical growth rates of population growth and the number of those wanting jobs, we find that economists are expecting to see about 3.3 million jobs created in the next year.
During the last economic expansion, job growth averaged 1 million jobs a year. During the previous two expansions, we saw about 2.3 million new jobs a year.
Even if the economists are right and we see job growth at unprecedented levels, that still leaves 15.1 million unemployed a year from now, about where we are now.
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