Economists forecast growth in 2011, but not for homes or jobs
As 2010 winds down, many are saying good riddance. Technically it was the first full year since the end of the Great Recession. The economy actually grew, but so slowly many didn't feel the improvement. So, what does 2011 hold?
If the forecasters are right, one phrase we should hear a whole lot less of in 2011 is "double dip recession."
"Never say never, but the risk of a double dip seems to be off the table right now," says David Shulman, a senior economist at the UCLA Anderson Forecast. "We're feeling better now than we were, say, a month ago."
Shulman says there are several reasons for optimism. Recently the regular trickle of economic data has been coming in better than expected. The stock market is on a bit of a roll, and then there's the president's tax compromise.
"The first thing, the tax compromise took off a bunch of uncertainty," he says. "The other thing is the 2 percent reduction in the payroll tax. That's worth $111 billion; that's real stimulus."
Steve Shulte, CEO of Porta King Building Systems in St. Louis, says he's looking forward to 2011 in a way he wasn't looking forward to this year. Customers are asking for estimates again for the modular buildings his company manufactures.
"We are getting requests for quotations, which is a major indicator that things are starting to change," he says. "I think we're going to see that turn actually happen in 2011."
He hopes to hire in 2011 -- but that will happen only if he can convert those inquiries into hard orders.
Jay Bryson, an economist at Wells Fargo Securities, says 2011 will be the year the U.S. economy turns a corner.
"I think people will measure 2011 as a better year than 2010. We're just not completely back to quote normal yet," he says.
Many forecasters put U.S. economic growth at around 3 percent next year, but there will still be areas of weakness. The housing market is expected to continue bumping along the bottom, and the job market won't be much better, says Bill Rodgers, an economist at the Heldrich Center for Workforce Development at Rutgers University.
"We will make progress, but we are not going to be back at that level where friends and family or colleagues next to you are going to be feeling overjoyed and wonderful about the economy," he says, "about job prospects and about their future."
In Warren, Mich., Karen Alexander doesn't see a shift in the economy.
"There's really no big rays of sunshine coming my way yet," she says.
Alexander used to make a good living working in the auto industry, but that was two years ago. Her unemployment benefits recently expired, and her financial situation is dire. She's set to start a part-time nursing job after the first of the year, but she knows already it's not the answer to her problems.
"I have hope, I have faith, but it hasn't done me justice in the last two years," she says.
And she's unfortunately in good company. The unemployment rate is currently 9.8 percent. Another 9 million people with part-time jobs who want to work full time. Economists Bryson, Rodgers and Shulman all agree the employment situation will improve next year, but not by much; they predict it'll drop to between 8.5 and 9.5 percent.
In other words: Better, but nowhere near good. Copyright 2010 National Public Radio. .