Economists Cut U.S. Growth Forecasts Through 2011, Survey Shows
The U.S. economy, the world’s largest, will expand less than previously estimated as a lack of jobs restrains consumer spending through 2011, a survey showed.
Gross domestic product will increase 2.6 percent this year and next, according to the median of 46 economists surveyed by the National Association for Business Economics from Sept. 2 to Sept. 21. A May poll projected growth of 3.2 percent for both years. Economists also cut estimates for personal spending, employment and consumer prices.
A plurality of 37 percent of economists surveyed characterized the expansion that began in June 2009 as subpar, reflecting declines in household wealth and “more onerous debt burdens” that are limiting purchases and lending. The share of respondents saying the expansion is uneven and “dominated by stimulus policies” increased to 17 percent from 5 percent in May.
The unemployment rate will remain at 9.5 percent or higher through the middle of next year and then ease to 9.2 percent by the end of 2011, according to economists in today’s survey.
The U.S. lost 95,000 jobs in September, led by a drop in government employment, and the unemployment rate held at 9.6 percent, the Labor Department said last week. So far this year, an average 68,000 jobs have been added per month.
Federal Reserve policy makers are now debating how to deploy tools for more unconventional easing to help sustain the economic expansion and protect prices.
The Fed will keep its benchmark federal funds rate near zero through the beginning of next year, and end 2011 at 0.5 percent, according to the survey.
Dr. Pinna says:
It is absolutely amazing that the government, followed by the press, simply does not understand that jobs are not made out of money. You can lower interest rates to zero, as Japan has already done for twenty years, and you will not create jobs.
Jobs are not created in a vacuum.Â Jobs are a manifestation of the Four Pillars of an Economy: Manufacturing, Agriculture, Service and Trade. These four areas are an expansion of what families in a group do.Â They are the modern equivalents of ancient civilization.
In the last forty years, the Money Managers, in their quest for higher profits, scuttled Manufacturing and Agriculture in the West and shunted these basic industries to Asia.
Service and Trade were therefore reduced.
Unless the U.S. and Europe can re-build their manufacturing and their agriculture, their job base will not come back. I cannot see this as happening, since Asia and Latin America and North Africa are already filling the needs for these products.
The logical conclusion for the West is a reduction in living standards.
When, after two or three decades, all the people of the world work for the same income, then the West will come out of its depression.