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Good Economic News and Not-So Good News

Writing at Big Government today, Joel Pollak says that any “reports of (economic) recovery have been greatly exaggerated.” According to Pollak:

“As President Barack Obama prepares for his State of the Union address in Congress, where he will no doubt claim credit for signs of economic recovery, new analyses by economists suggest that growth will slow and unemployment will remain virtually unchanged by year’s end.”

Pollak links to a USA Today story today that says:

“The U.S. economy's growth will slow this year after a blast of stronger growth in late 2011, leaving the 8.5% unemployment rate about where it is now on Election Day, according to USA TODAY's quarterly survey of economists.

“The economy will grow at an 2.2% annual rate the first half of 2012 after an estimated 3.1% gain in fourth-quarter gross domestic product, according to the median forecast of the 48 economists surveyed. The government reports on fourth-quarter GDP Friday.

“The biggest reason for slower growth is that a late-2011 bounce back from the effects of the Japanese earthquake last March won't last, according to Diane Swonk, chief economist at Mesirow Financial. Slower growth will help keep unemployment at 8.4% or higher through year's end, economists predict.”

The USA Today article cites several good pieces of news, e.g., the decreasing risk of a U.S. recession. On the other hand, USA Today presents such bad news as employment not returning “to what’s considered a healthy level until 2014 or later.” The newspaper added the following piece in their “not-so-good” category:

“Job growth will slow to a monthly pace of 144,000 new jobs early this year, after an estimated rise of 165,000 a month in the fourth quarter, the panel predicted. In fact, the economy produced an average of 137,000 new jobs a month in the fourth quarter, driven by December's better-than-expected gain of 200,000 new jobs.”

Great news considering that taxes are expected to rise in 2012 not to mention the taxes that will be implemented as ObamaCare goes into effect. Not!

Reference. The non-member summary of the National Association for Business Economics survey is here. Only NABE members can read the full survey.

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