Big job gains expected next year, economists say

Could the unemployment rate drop to 6.5% in 2014? That's the forecast that's turning heads.

By Kim Peterson May 23, 2013 3:48PM
Image: Construction workers (© image100/Corbis)Economists at the Federal Reserve Bank of New York are very optimistic about next year, forecasting that the unemployment rate could fall to about 6.5% by the fourth quarter of 2014.

And how exactly might the unemployment rate get that low? New jobs. Lots of 'em. The bank thinks the country will add a very robust 302,000 a month next year. That's a steep gain from what we've been seeing so far this year, with 165,000 added in April and 138,000 in March.

The overall economy will see a nice rebound, the bank says, with real gross domestic product growth of about 3.25%.

That will be a welcome change after watching 2013 sputter a bit lately. And the rest of this year doesn't look that rosy either. Real GDP growth this year is expected at only 2.5%, below the 3% that the New York Fed predicted a year ago.

You don't have to look far beyond Washington, D.C., to see why the rest of this year looks sluggish. A major factor is the combination of the federal sequester and tax increases that came out of the deal to avoid the fiscal cliff, the economists wrote in a blog post released Thursday. Those two events could pull back economic growth by more than 1% this year, but the drag should be smaller next year.

So while the unemployment rate will fall in 2014, the economists said, for the rest of this year it may slide to just about 7.25% by the fourth quarter. Currently the unemployment rate is 7.5%.

More on moneyNOW

May 23, 2013 5:15PM
At the pace we've been going, the UE rate WILL reach 6.5% late next year, but it won't be because of job creation.  Look at how fast it's fallen over the last 2 years, compared to the number of net jobs actually created.  This is a direct result of shifting people off the UE rolls and onto the retirement rolls and disability rolls.  We just need to reclassify another couple of million jobless folks, and the magic 6.5% number will be reached.  Then the question will be, how long before Bernanke pulls the plug on QE after his stated goal is reached?   And will the Fed tolerate the inevitable downturn long enough for us to actually hit a bottom and begin a sustainable recovery, or will they break out the duct tape and popsicle sticks and prop things up for awhile longer?
May 23, 2013 5:28PM
Another bogus prediction without sound data to back it up. Not to mention a process that is unpredictable in the first place!
May 23, 2013 6:40PM
Next year! Next year! The jobs will appear. It' only a year away!!!

From Chief Economist Annie...
May 23, 2013 10:47PM
The way the government tracks unemployment... we could see "their" rate drop to zero and still have millions out of work for years and being ignored. Economists are a problem. They are paid salaries to generate figures they speculate but cannot validate. Can anyone tell me what value an economist is in a Depression?
May 23, 2013 5:20PM
This is obviously a case of the Fed pimping for the administration, trying to inspire investors to stay the course while the FED cuts and runs, retreating on easy money bond purchases and encouraging the private market to step up and invest in new employment to stimulate growth in lieu of the false economy stimulated by QE 1-2-3.
May 23, 2013 9:07PM
LoL, i love some of these articles.  You wait and see when Odumbocare goes in action what happens.  The other thing you hear from people bashing the Republican party about Odumbocare is you want to take it away and you dont want us to have insurance and they just dont get it.  Well, these idiots that are sayin the Republican party doesnt get it is about to find out.  Business is going to do what business has to for their survival.  Yea, you can elect all the Dumbocrats you want but business will always win.  Yea, you can boycott this store and boycott that store, but when all these stores cut their insurance and its all on the employees...ummm, who ya going to boycott?  Employees are about to see what its like living on part-time work from here on out you think they're hurting now just wait, but you know you have to give the America people a little pain on stupid choices they make.
May 23, 2013 11:09PM

they are full of (BS), uhtil we the people clean house of lifetime pol's who answer to big money

the economy will stay balled up.

May 23, 2013 10:19PM
Sounds good but no answers as to "why".  Must be public sector jobs to handle all the social programs, people giving up, or more Boomers getting out of the workforce?   It must be part-time jobs and/or minimum wage?
May 23, 2013 11:56PM
The Fed is getting ready for the elections of 2014. They want to keep their jobs by keeping the politicians they like in power.
May 23, 2013 8:22PM
So the summer of 2014 is the summer of recovery?
May 23, 2013 11:13PM
Now think about this,,,,the headline say's  "big job gains expected for next year" with all the criminals in our government and all the agenda drivin fools ....this phrase means absolutly min everything is great and then the next day everything is falling apart....your all liars.....everything changes in days and have people commiting crimes daily in your government and reports and opinions change hourly.
May 24, 2013 7:28AM
Hello, I am a nobody with a forecast. I predict we will readjust unemployment to show those who fell off the grid to a staggering 9.8% by 4th QTR 2014. Our GDP will fall to 1.9 and the market will adjust to where it should have been all of the past 4 years to a gorgeous 7,700. While I have no evidence to support this much like the Federal Reserve Bank, I do believe if we bet I would be closer to the real numbers. Earmark this and check back in 17 months. 

What a stupid article. WTF are they predicting for 4th QTR 2014? Because they know the next 16 months are going to be horrible. This is how you artificially prop the market...F$#kers!
May 24, 2013 8:26AM
Any articles on MSN regarding money or the economy tend to be crap.
May 24, 2013 9:20AM
Just in time for an election.  NICE!
May 23, 2013 9:33PM
yea there building more Walmarts and McDonalds lmfao
May 23, 2013 11:23PM

Speaking to my son over dinner last week was an eye opener about the job market. His firm is in the seventy to eighty million dollar range. They have hired some of the best head hunters to fill over fifty positions in the company. Every position pays over a hundred thousand a year. The few that have been hired are from Russia, Spain, Brazil, Finland and Germany totaling sixteen. They are fluent in English. All were hired away from existing companies because of their experience and records of verified accomplishments. I asked the big question of why no US hires. Answer was no US applicants have the educational backgrounds to be hired. The average age of the new hires is forty seven with one at fifty six. (My son is forty three) His firm is stagnating because the expandability can only be accomplished with qualified people. "What is our problem" I foolishly asked. His answer, confidence, ambition and desire to learn our products, present them in a simple features, benefits and return on investment. US candidates want salary not commensurate with their knowledge and every company benefit. foreign workers want a challenge to succeed and a salary based on their record of performance. They have a large overseas presence however seven major cities in the US are being covered by other existing cities and the potential is being lost because they can not hire to expand.

May 24, 2013 8:37AM
Not one word as to where these fictional jobs will come from. If we didn't have the multitude of government restrictions and red tape, there would be new small businesses springing up on every street corner and everyone who couldn't find a job could make one. Unemployment would be rare. 
May 24, 2013 10:36AM

There are lies, damned lies and statistics.

-- Mark Twain

The Federal Reserve is conspiring with the Congress and President to try to make people think the economy is improving, so they will spend more.

Perform Internet Search: civilian labor participation rate fred

Civilian Labor Participation Rate is down from 67% in 2000 to 63.5% today. An almost 4% loss, that amounts to 9 to 12 million more unemployed people now than in 2000.

The unemployment rate is a damned lie, er... statistic.

May 24, 2013 10:41AM
Obamacare is turning full time employees into part time employees.

It's the ole "The economy has created 3 million jobs. I know, I have three of them" trick.

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