U.S. economy improving faster than expected
3/6/2012WASHINGTON — The U.S. economy is improving faster than economists expected.
They now foresee slightly stronger growth and hiring than two months earlier, trends that could help President Obama’s re-election hopes.
That’s among the findings of an Associated Press survey late last month of leading economists. They think the unemployment rate will fall from its current 8.3 percent to 8 percent by Election Day. That’s better than their 8.4 percent estimate when surveyed in late December.
By the end of 2013, they predict unemployment will drop to 7.4 percent, down from their earlier estimate of 7.8 percent, according to the AP Economy Survey.
The brighter outlook for jobs follows five straight months of declining unemployment. One reason the rate has fallen so fast is that fewer out-of-work Americans have started looking for jobs. People out of work aren’t counted by the Labor Department as unemployed unless actively seeking jobs.
The AP survey collected the views of two dozen private, corporate, and academic economists on a range of indicators. Among forecasts:
Americans will save gradually less and borrow more, reversing a shift toward frugality that followed the financial crisis and the start of the Great Recession.
Mr. Obama deserves little or no credit for declining unemployment. Only one of the 19 economists who answered said Mr. Obama should get “a lot” of credit. They give most to U.S. consumers, who account for about 70 percent of economic growth, and businesses.
The economy has begun a self-sustaining period in which job growth fuels more consumer spending, which should lead to more hiring.
European leaders will defuse their continent’s debt crisis and prevent a global recession. But their economy may shrink in 2012.