Analyst: US to create 2M jobs in 2011

The most accurate forecaster of the unemployment rate over the past 2 years says the nation's economy will generate twice as many new jobs as it did last year.

By MSNMoney partner Feb 9, 2011 11:02AM

By Bob Willis and Kristy Scheuble, Bloomberg

 

The U.S. economy will create 2 million jobs in 2011, twice as many as last year, said Scott Brown, the most accurate forecaster of the jobless rate over the past two years, according to Bloomberg News calculations.

 

Unemployment will end the year at 8.6 percent, projected Brown, chief economist at Raymond James & Associates Inc., less than the 8.8 percent median forecast of 61 economists surveyed by Bloomberg from Feb. 2 to Feb. 8. It dropped to 9 percent in January from 9.4 percent the prior month.

 

President Barack Obama's deal with congressional Republicans to reduce the payroll tax and extend Bush-era cuts will put more money in Americans' pockets and spur demand, said Brown. The need to rebuild inventories as sales climb will give the world's largest economy an added lift this year, he said.

 

"We'll see consumer spending remaining pretty strong," Brown said in a telephone interview from St. Petersburg, Florida. "Firms large and small won't hire unless they see more demand."

Economists in this month's survey projected gross domestic product will grow 3.2 percent in 2011, the most in seven years, according to the survey median. That was up from 3.1 percent in the January survey. Brown forecasts growth this year of 3.3 percent accelerating to 3.4 percent in 2012.

 

Brown arrives at his unemployment forecasts by mining data on jobless claims, firing plans, small business sentiment and purchasing manager surveys. For his longer-term outlook on economic growth, he often writes up lists of positives and negatives, weighing how they may play out.

 

Years away

Brown forecasts the economy will create about 167,000 jobs a month on average this year. The total gain, while more than double last year's 909,000, shows the U.S. is still years away from recovering the 8.75 million lost in the recession.

 

Some companies are focusing on adding hourly staff to boost sales, while reducing higher-paid management positions.

 

Lowe's Cos., the second-biggest U.S. home-improvement retailer, plans to add 8,000 to 10,000 weekend sales positions to improve staffing at the busiest time of the week. The Mooresville, North Carolina-based chain also will cut 1,700 middle-management jobs as profit growth trails that of larger rival Home Depot Inc.

 

The Standard & Poor's 500 Consumer Discretionary Index, which includes retailers like Lowe's and J.C. Penney Co., has climbed 34 percent since June 30, exceeding the 29 percent gain in the broader 500 Index.

 

Walt Disney

Walt Disney Co., the world's biggest theme-park company, yesterday reported first-quarter profit that beat analysts' estimates as the recovering economy drove attendance gains at its theme parks and advertising growth at cable networks led by ESPN.

A Labor Department report last week showed payrolls rose by a fewer-than-forecast 36,000 in January, depressed in part by winter storms. "Growth is improving but it's not enough to generate a lot of jobs," said Brown.

 

That forecast is in sync with the view of Federal Reserve Chairman Ben S. Bernanke.

"Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established," Bernanke said in a speech in Washington last week. "With employers reportedly still reluctant to add to their payrolls, it will be several years before the unemployment rate has returned to a more normal level."

 

Less optimistic

Brown's peers this month were less optimistic on the outlook for household purchases. Consumer spending will average 3.2 percent this year, the biggest gain since 2005, according to the median estimate of economists. Brown sees consumer spending rising 3.7 percent in the current quarter and advancing 3.4 percent for all of 2011.

 

Zach Pandl, an economist at Nomura Securities International Inc. in New York, is among those who agree spending will get off to a strong start this year. "Better job-market conditions, improving confidence and the payroll tax cut are supporting spending in the first quarter," said Pandl.

 

Bank of America Merrill Lynch Global Research sees the consumer lagging behind the broader recovery, with inventory rebuilding a major contributor to growth early in 2011 and continued support from business investment.

 

"Income growth is weak and income is the single most important feed into consumption," Neil Dutta, an economist at Bank of America Merrill Lynch in New York.

 

Brown agrees hurdles remain for the expansion. He is "watching housing prices closely" because further declines will undermine confidence and consumer spending. Strains in state and local government budgets will also lead to spending cuts and job losses, weighing on the recovery, he said.

 

®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.

 

20Comments
Feb 9, 2011 12:00PM
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"If you're going to predict, predict often." - John Kenneth Galbraith
Feb 9, 2011 1:43PM
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wow...........lowes will be adding 8,000-10,000 weekend sales jobs.........what we need is full time jobs.........part time jobs should not be counted as a job , just to make unemployment look better

Feb 9, 2011 2:05PM
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Creating part-time jobs and paying them with play money!!!!! Then fudge the numbers.
Feb 9, 2011 1:18PM
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Better get new batteries for that crystal ball !!!!
Feb 9, 2011 3:23PM
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News flash:

 

9% unemployment is a LOT more than 2 million folks and a LOT more people are gonna lose their jobs this year.

 

Also, If you were lucky enough to get hired after being unemployed for 6 months AND unlucky enough to loose your job less than a year later, you don't get benefits and you won't show up as a new unemployed statistic.  You'll just be unemployed with nothing.

Feb 9, 2011 3:18PM
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Unemployment rate has seen some improvement because of certainty in the business world - that happened after November election.

 

Second, many have left the job market as they are discouraged and are getting all the freebies from the Govt. And this population is not included in the unemployment calculations.

 

If we added 1 million jobs last year and are going to add 2 million jobs, how many jobs are we loosing?

 

Biggest question: where are these jobs? All I need is one.

Feb 9, 2011 2:45PM
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How is it jobs keep getting added, but unemployment is going up? Because they are not real jobs - they are paper jobs.

It's a sad fact that instead of wasting almost a TRILLION dollars of failed job programs, Obama would have been better off throwing hundred dollar bills out of Air Force One while flying around the country. Imagine one TRILLION dollars falling from the sky. That would get the economy going. Tens of millions of hundreds fluttering to the ground.

You can say the ball was rolling - but he's done little to nothing to stop it.  He just increased the incline.

The infrastructure improvements did ZERO to help unemployment (although that's what they were alleged to have been pushed) - the money just went to the same companies and same employees it always did - they just worked longer hours, or took a lot longer to do the jobs. Instead of doing one job at a time, they did five. So all the jobs took 5x longer. ZERO new hires.  I've seen it locally. The same company has a dozen jobs going around here. There are workers at ONE job any given day.  TWO YEARS to repair an intersection. TWO YEARS to repair a bridge. And there is still no end in sight!

Feb 9, 2011 3:23PM
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Great...if the jobs pay living wages in line with the education and experience level of the applicants.  I, a single person, have both of those, along with payments on a small condo and Honda Civic.  Minimum wage won't cut it, especially if I'm doing tasks that merit much more pay.
Feb 9, 2011 5:45PM
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I own a business.I can't hire any new employees because nobody is spending any money.The government hasn't helped me at all.I've had to layoff four people and everyone else had to go to minimum wage and reduced hours.As for myself,I haven't drawn any cash for six months.How about a bailout for small biz instead of the wall street dweebs?
Feb 9, 2011 5:45PM
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Really now, Lets take a little peak back in history when we had a 70% top tax bracket!  Ronny and friends decided to give the top dogs a massive tax break,greatly raise the max on social security and increase your % you pay on social security.  Has everybody forgot this small step in history?   Remember it was called trickle down economics!  These massive tax breaks for the rich was supposed to put more money into their hands since after all us sheeple all know that these smart people are the ones that create jobs,right!  Wrong! We're still under this same asinine tax structure! Anybody with a third grade education is smart enough to hire our friends across the pond,ship the widgets back here,and have our part time people proudly display all the wonderful Chinese products for us to buy, which in turn allows them to continue to build up their defense and so on.    Trickle down,Trickle down,Trickle down!     Before long you'll have to have a degree in communications to be a Wal-Mart greeter!  I'll see ya in the cheese line!Smile

 

 

Feb 9, 2011 5:30PM
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Where are these jobs going to be?? I've been unemployed for going on 3 years now!! I lost everything, my home, my car, my life savings, basically my former middle class life. Can't even get a PT job at McD's in my area with 15% unemployment. Forget gettting to talk to an HR person these days too. Apply online only and then never ever hear from anyone.  Why??  All because of Wall St greed!!!  I should know I used to work of one of the largest Banks that got bailed out.
Feb 9, 2011 4:37PM
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Those of you blaming the President for the unemployment being at 9% shows your lack of understanding of the issues and your bias. I don't recall when Reagan was president with a near 11% unemployment rate people saying it was really 18% or them saying the same of our last president . President Bush, Congress, the presidential candidates and the American public were told the same thing from every economic and financial talking head - "Bailout the American financial industry or see a NEW GREAT DEPRESSION" (Lehman Brothers - was just a taste). The talking heads were saying at least 25% unemployment with very high inflation and a collapsing stock market. Letting it all fail would not have hurt the truly wealth; they just would have pulled up stakes and become expats (not illegal).

 

This President has been pro business by saving or trying to save the auto industry, financial industry, and housing industry with him trying to get them to hire and at same time trying to put back regulations that help the average American. His balancing act is a hard one to pull off, but may be doable now that Republicans can't just cry "Say no."

 

Off shoring of jobs, globalization, and deregulation has been going on for decades (deregulation really about 9yrs). All countries including our own wants cheap labor and goods, but we all want to make more money  than our friends, families, enemies, neighbors, and the average national income. Well guess what?  Off shoring and globalization are and will continue to lower the standard of living we have by pushing wages down, making it a employers market, increase inflation, lowering education, reducing regulations (peanut butter, eggs, beef , spinach, BP, etc) and widening the gap between the haves and have nots. Big business wants deregulation, cheap wages, no unions, and government handouts (on top of big profits) which is what the Republicans are trying to give them.

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Doesn't matter how many real jobs are created- it won't be enough and the Obama crew will make themselves look good by adjusting the numbers with the new obamath

 

HAHAHAHAHAHA love that there are so many oslobberlovers on this site

Feb 9, 2011 2:24PM
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Mirage.  You know what is delusional?  Blaming the jobs lost on Obama.  That ball was rolling.  You can argue whether or not his policies have brought the jobs back at the best rate.  But to throw the original losses on his presidency is delusional.
Feb 9, 2011 3:11PM
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"No need to worry. You can all go back to your homes now.  The great and powerful OZ has things well in hand".

Feb 9, 2011 5:57PM
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Jobs huh?  Well, are those $7, $10. or $20 an hour jobs?  We have a new 'tourist center' going in up the road.  Yahoo.  everyone is saying it will create jobs. Yeah sure, but nothing you can support a family on.  
Feb 9, 2011 5:20PM
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Anyone trusting any numbers coming out of .gov is seriously naive. There is a huge shadow inventory of foreclosures sitting out there, not even listed on the MLS. Over one third of mortgage holders are underwater in their homes in several states.....and that figure will climb in 2011 and probably 2012, leveling out in 2013. More are living in their homes rent free despite not having made a payment in a year.

 

Without balance sheet gimmicks, the big banks are insolvent. Same for the states.

 

Job creation...yeah, right. Must be a lot of WalMarts getting built.

Feb 10, 2011 1:04AM
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I must have hit a nerve...

 

If on a ultra far left wing website like CNBC my comments are roughly evenly split thumbs up and thumbs down....  Obama will be lucky to carry Illinois next election...

Feb 9, 2011 1:04PM
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With Obama's job killing policies I doubt there will be 1 million jobs created.   Laughable liberal press wishfull thinking...

 

Can you say DELUSIONAL?  But lets say its true...  with 14 million unemployed it will only take 4 years to return us to the day Obama took office... 

Feb 9, 2011 5:05PM
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Stop complaining and stop waiting for the government to do something to get you a job. It's not their responsibility. If you want a job, go out and do something about it; instead of sitting home and complaining and living off your parents and other family member. What happen to American pride?

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