February NABE Outlook

The National Association for Business Economics released their Outlook for 2011, a consensus macroeconomic forecast by a panel of members who specialize in such opinion making using survey data from some of their 2,300 participants.  It is an attempt to form a business-centric expectation of economic conditions looking forward through the balance of this year and into 2012.  The conclusions reached have a welcome, though still slight, positive slant.

Some 40% of survey respondents feel the current recovery will continue, albeit at a moderate pace.  Another third see things picking up enough to get past present problems until they begin resembling a normal business-cycle expansion.  Just 11% see things resuming a below average growth rate, quite a drop from the 40% so inclined just last November.  The upshot of all this leads them to forecast our nation’s GDP will grow by 3.3% this year, a substantial revision to November’s more dour 2.6% expectations.  For 2012 they expect real GDP to edge up just a tad more to plus 3.4% year over year.

Also encouraging is the report’s view of labor conditions.  Hiring is expected to rise all year long, averaging 178,000 new jobs each month, but accelerating so that we’ll see 210,000 workers landing positions by December.  This momentum is also expected to continue climbing into 2012, hitting some 215,000 monthly next year.  Unfortunately, this will not be enough to cover fully their projected swelling of the labor force, resulting in a rather high unemployment factor of 9% by year’s end, gradually decreasing to 8.2% at the end of 2012.  This figure will still likely present problems our economy must find a way to overcome if consumption and housing are to ever regain their historic averages.