Tags: Economists | unemployment | rate | improve

WSJ Economist Survey: Job Market Won’t Improve Much

By    |   Tuesday, 15 May 2012 07:15 AM

Economists surveyed by The Wall Street Journal see the unemployment rate barely shrinking for the rest of the year – to 7.9 percent on average from 8.1 percent in April.

The 50 economists forecast monthly payroll gains of 185,000 over the next year. That would mean faster hiring than in any of the last six years. But many economists say the minimum monthly gain necessary for healthy growth is 200,000.

Economists don’t expect employment to expand fast because they don’t expect the economy to expand quickly. They predict GDP will grow 2.5 percent for the year as a whole.

Editor's Note: Startling Proof of the End of America’s Middle Class. Details in the Video

To be sure, economists see just a 16 percent chance of another recession.

"An entrenched upturn in process in the private sector is a big plus," Allen Sinai of Decision Economics, who sees almost zero chance of a downturn, tells The Journal.

But he and others emphasize that risks are present -- in particular, Europe’s debt crisis and the U.S. tax increases and spending cuts currently scheduled for next year.

Assessing the risks to their predictions, 70 percent of the economists say their projections are more likely to be too positive than too negative.

Europe’s mess threatens financial markets as well as the economy.

“The whole European political situation is really the focus at this point,” Madelynn Matlock of Huntington Asset Advisors, tells Bloomberg. “Nobody really knows what’s going to happen next, and the [stock] market hates uncertainty more than anything.”

Editor's Note:
Startling Proof of the End of America’s Middle Class. Details in the Video

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