Is job growth prediction realistic?
TEXT OF STORY
Kai Ryssdal: The three feet of snow still on the ground in Washington didn’t stop the Obama administration from the swift completion of its economic rounds today. The White House let fly with its annual Economic Report to Congress this morning — 462 pages chock full of financial figures and forecasts. One of the headline numbers — not that we want to spoil it for those who can for the first time download the Economic Report onto their e-book readers. Anyway, the headline number over there is 95,000. As in, the White House expects the economy to create an average of 95,000 jobs every month. This year.
That is a turnaround, albeit a modest one, from the job losses that have been piling up since the recession began. Whether it’s a realistic number? That’s another question entirely, as our Washington bureau chief John Dimsdale reports.
JOHN DIMSDALE: Adding 95,000 jobs a month is a lot better than losing hundreds of thousands, like the shrinking economy did most of last year. But that won’t bring down the unemployment rate. Still, the head of the President’s Economic Council, Christina Romer, is confident of a turnaround.
CHRISTINA ROMER: We did our usual forecasting procedure, which is a very complicated thing using lots of professional forecasters at the various agencies.
GARY SHILLING: I say lots of luck to that prediction.
Economic consultant Gary Shilling figures the economy will maybe grow 1 percent this year, with little to no job creation.
SHILLING: The question is, you know, where is it going to come from because housing is just saturated with excess inventory. Other sectors of the economy, state and local governments, hey, they’re retrenching. They have huge deficit problems. And U.S. consumers simply aren’t buying at the rate they were earlier.
But Princeton University economist Peter Kenen hopes the reality is the economy grows more jobs than the White House is predicting.
PETER KENEN: The more distressing aspect of it is that it translates into little more than 1.1 million for the whole of the year 2010, which is barely enough to keep the unemployment rate from rising.
The president’s advisers do see accelerating job growth next year, averaging nearly 200,000 jobs a month. That’ll bring unemployment down, although it will still average higher than 9 percent for 2011.
In Washington, I’m John Dimsdale for Marketplace.
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