Over the past few months in a row, the various indicators of Employment has increased. Job gains have been surprised to the upside. Initial unemployment claims was at the level of non-recession. Planned JOB CUTS are on the level of non-recession. The big question is whether the recent strength in the various economic indicators pointing to a potential explosion in the job.
At the beginning of 2011, the consensus among economists regarding the real economic growth in the us for 2011 is somewhere around 4 percent. It seems difficult to believe for a number of reasons. First, according to the U.S. Department of labor and commerce, revenue has been basically flat since 2007. Second, since the second quarter of calendar 2008, consumers have been shifted from spending extra income to pay debts. Third, with unemployment as high as it is, the fewer people will tend to spend freely. I could go on.
The consensus forecast of just doesn’t make sense. With about two-thirds of the economy are driven by consumer spending, jobless presented a challenge of overhang. Somewhere between 2 and 2.5 percent seems reasonable given the headwinds. As we move through 2011, we see a consensus figure drop to 3.6 per cent and 2.7 per cent. In one week, we’ll get a first reading on economic growth in the fourth quarter of calendar and thus saw full-year 2011. If we look at 2 percent for the full year, we will be lucky. More likely, this would be approximately 1.8%.
In some ways, we have a chicken and egg situation. Whether economic growth driving employers to hire? Or, if the consumer used to drive economic growth?
Various economic indicators has clearly improved over the past few months. Various reports PMI has moved back to strong growth after diving their language. The Empire State manufacturing survey shows growth again. Retail sales have been strong. And, consumers have really broaden the use of credit. HomeBuilder sentiment has even been moving up (though it still has a ways to go). Auto sales are returned to the level before the crisis.
