When the ball dropped in Times Square on New Year’s Eve 2010, people were feeling optimistic about the future of the US economy. With the recession over, a quick recovery seemed like it could be just around the corner. Some economists projected growth to be as high as 4.3% in the first quarter of the year. But then the Japanese tsunami disaster shook the world economy, and soon after, oil prices skyrocketed.
According to a recent CNN Money article, this start-and-stop recovery experienced over the past year could be affecting hiring and unemployment for some time to come. The recent growth in the economy has not been great enough to give businesses the confidence to start hiring significantly again. The jobs report for June is expected to show only about 120,000 jobs added to the economy. Usually, it takes an addition of at least 150,000 jobs per month just to keep up with population growth.
Well, the economy is recovering; just not at the pace we would like. According to Harvard Economics Professor Kenneth Rogoff, economies tend to grow very slowly after economic crises. Sometimes it can take around five years for a full recovery to occur. Businesses are feeling uncertain about consumer demand, and are waiting to see the impact of the government’s decisions concerning the national debt, health care reform, and new financial regulations.
The job forecast is better for 2012, with around 200,000 new jobs expected to be added each month. Economists are now predicting growth for 2011 to be around 2.6%, and beyond that, they are unsure. While some fear a double-dip recession, it is also possible that we will see significant growth in 2012 and 2013, helping to end this period of economic turmoil.