What economists are forecasting for 2014

Job growth is “puny versus what we actually achieved in the past," one economic says.
MCT Regional News
Nov 27, 2013

Economists are expecting a better 2014 for economic growth, saying with less drag from federal government policy, the economy is poised to continue adding more jobs, spurring higher consumer spending.

The economy should also benefit from stronger export growth as demand improves in Europe and Asia, experts said.

The growth is not expected to be dramatic; The PNC Financial Services Group’s economists are projecting real Gross Domestic Product growth of 2.5 percent for the year ahead, up from growth estimates of 1.6 percent for full-year 2013. Real GDP estimates the value of goods and services produced in the U.S. adjusted for inflation.

PNC is expecting total employment growth of 1.6 percent in the U.S. to be unchanged in 2014 from 2013, but sees the national unemployment rate sinking from 7.4 percent in 2013 to 6.7 percent next year.

“It’s going to be noticeably better in 2014 than 2013,” said Gus Faucher, senior economist for PNC.

A regional outlook compiled by an advisory committee of five Cincinnati-area economists calls for similar real U.S. GDP projections, but expects higher national employment growth of 1.8 percent in 2014, compared to 1.7 percent in 2013.

The committee, whose findings were presented by the Cincinnati USA Partnership for Economic Development and Northern Kentucky Chamber of Commerce, predicts Gross Regional Product growth for the Cincinnati metropolitan of 2 percent in 2014, up from 1.4 percent in 2013. The consensus of the five Cincinnati economists is for area employment to rise 1.4 percent in 2014, slightly above a 1.2 percent growth rate in 2013. The group also sees regional unemployment falling below 7 percent.

“We have a great foundation for growth to build a virtuous cycle on,” said Richard Stevie, a panelist on the Cincinnati economic advisory committee.

“As people spend more and as the economy is moving ahead, even though it’s going at a slow pace, that creates some jobs, which then encourages further spending and that builds upon the growth in the economy,” Stevie said. “Part of this foundation right now is construction and autos.”

Remember this time last year? Talks were of the economy going off the fiscal cliff, and questions abound about the impact, especially here, of sequestration. The so-called fiscal cliff was the roughly $600 billion of tax increases and budget cuts set to take effect at the end of 2012, early 2013.

Turns out sequestration had real, but less-than-feared impacts on the economy. The uncertainty those policies created entering 2013 was enough to cause businesses and consumers to hesitate, Faucher said. Businesses have hesitated to spend money to hire more people. Consumers, who saw their payroll taxes rise, held back on spending.

As 2013 draws to a close, the risks are more balanced, Faucher said.

Potential drags heading into 2014 include fears of another government shutdown related to debt ceiling debates and the implementation of federal health reform.

However, “people aren’t as concerned about (a government shutdown) this time around because we’ve already suffered through it and they’re unlikely to do it again,” Faucher said. “We know what tax rates are going to be and they’re not going to increase.”

“We can’t even achieve average growth”

The average long-term growth rate for the U.S. economy going back 60 years is about 3 percent, said Ken Mayland, president of ClearView Economics LLC. But the American economy’s recovery has been feeble. In 11 of the last 15 quarters, the economy has grown at an annual rate of less than 3 percent, Mayland said.

“We can’t even achieve average growth,” Mayland said in October at KeyBank’s annual economic forecast presentation.

Major problems include weak job growth. The U.S. has seen payrolls increase by 184,000 on average a month over the last 12 months. To put that in perspective, payrolls were growing by about 450,000 a month in two post-recession periods in the 1970s and 1980s adjusted for the size of today’s labor force, Mayland said.

Job growth is “puny versus what we actually achieved in the past,” he said.

Meanwhile, average wage growth is trending at about 2 percent, the same as inflation, he said.

“The increase in wages has only compensated for the increase in prices,” he said. “You’ve got to get job growth higher to achieve higher economic growth.”

Other things impacting the economy include a period of federal government stimulus replaced by budget cuts; regulations; and uncertainty.

“We had some major, major uncertainties as 2012 came to a close and we entered 2013. The easiest thing to do is wait and see until the dust settles,” he said. “A number of the uncertainties have been reduced” since this time last year.

“Where we are disappointing is job growth”

Nationally, the economy remains about 1.5 million jobs below the pre-recession employment peak, Faucher, of PNC, said. However, U.S. GDP actually recouped its losses from the recession by the end of 2011, according to government figures.

Faucher is expecting strong growth for 2014 in anticipation that jobs will continue to grow as productivity — which has boosted output — slows, he said.

Businesses are starting to find they can’t count on gains in productivity thanks to technology and hard work alone to meet growing demand.

As demand has improved, corporate profitability has picked back up, he explained. Therefore, companies have the means to hire at a time when labor costs are still relatively low.

These factors create conditions for stronger job growth.

Its been weak because “businesses are scared and businesses have been very, very cautious. This is the worst downturn that we’ve experienced in our lifetime,” Faucher said. “They need to be convinced the economy will continue to improve, demand will continue to improve, to be convinced to hire.”

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By Chelsey Levingston - Journal-News, Hamilton, Ohio (MCT)

©2013 the Journal-News (Hamilton, Ohio)

Visit the Journal-News (Hamilton, Ohio) at www.journal-news.com

Distributed by MCT Information Services

Comments

hit the road jack

You do not have to be an Einstein to know that their will be part time low wage jobs in 2014,Obama gave permission for all good paying jobs(what ever is left) to leave the country and even sneak a little cash to go.

methodman

So some people might have to have two jobs. No business needs anyone's permission to leave. Tis Thanksgiving you know. Freakin scrooge.

mera7u

before I saw the receipt that said $4563, I have faith that my brother could truley taking home money in their spare time at there computar.. there friend brother haz done this for less than 7 months and at present paid for the debts on their cottage and purchased a great Chrysler. pop over to this site http://goo.gl/f6e95V

Scranton Tibbs

I'll be glad when Obama is done and the Republicans make everything perfect again. It's gonna be like paradise on Earth. Everybody will have a job and all kinds of money. No war, poverty, hunger, or debt ever again. Just a paradise of love and freedom. I can not wait.

hit the road jack

Well, for someone who campaigned for all of the above to be like heavem when he was elected,would you say he has pulled the wool over your eyes? its not bad enough the first 4 years were nothing but lies but YOU were stupid enough to elect him again. Isn't the definition of insanity doing something a second time and expecting different results? or did you get your unemployment or welfare check and it doesn't matter?

TOPGUN01

UNTILL WE CHANGE THE TRADE BILLS CLINTON, BUSH, AND OBAMA HAVE MADE TO TAKE ALL THE JOBS ELSEWHERE ! It WILL NEVER BE THE SAME?IT,S TIME TO VOTE THEM ALL OUT!

Scranton Tibbs

Exactly. All of them. Regardless of the party. Finally someone gets it. Nice post.

Fromthe419

Until our politicians realize we can not be a "service economy," nothing will change. We need to export stuff and decrease our trade deficit... money will flow out of this country and we will continue to see articles like this.

Contango

Re: "We need to export stuff and decrease our trade deficit..."

Like export 'what' to 'where'?

All central banks are trashing their currencies in an attempt to help make their rates of exchange as cheap as possible.

It's called: Beggar thy neighbor.

http://www.investopedia.com/term...

Fromthe419

Contango, you and I are in the same camp as far as the economy goes. We live in interesting and uncertain times, As a country we have do something with our Current Account or balance of payment, as I stated earlier if there is more going out than is coming in we are doomed. With our enormous national debt, printing, spending and borrowing, I personally think we are doomed. I don't see a mathematical possibility of our country coming out of this in the end...either we inflate our way out of it (which our creditors will not allow), or we default. I don't see any other solution.

Cliff Cannon

@Fromthe419: " I don't see a mathematical possibility of our country coming out of this in the end...either we inflate our way out of it (which our creditors will not allow), or we default. I don't see any other solution. "


Very well said. The " other solution " which I see is encouraging as many young people to be builders, who think like leaders. Obviously, our children are going to inherit this mess. So it seems the least we can do is try our level best to teach them as many leadership skills as possible. Because me,you and God know they are going to need them.

Contango

Re: "to teach them as many leadership skills as possible,"

So they can become rich and then we can tax h*ll outa them.

I tell my daughter that we baby boomers are probably gonna eventually need about 85% of her income - so work HARD!

With the costs connected to the health and welfare of the aging boomers, this country is on course for a generational train wreck of apocalyptic proportions.

Nursing home care is gonna loom large:

http://www.nytimes.com/2012/09/0...

And OH has filial laws (TX doesn't). Children can be forced to pay for care.

http://elder-law.lawyers.com/eld...

Cliff Cannon

" With the costs connected to the health and welfare of the aging boomers, this country is on course for a generational train wreck of apocalyptic proportions."


No doubt. Obviously, nearly everyone our age is in a rush to get their social security " while they still can " and the same with most folks eligible for pensions.


So the money problems will quite likely continue to grow till it explodes in our face. Let's toss in the ever constant massive terrorist attack on America,that could shut down our economy as well.


Then if that ain't enough to worry about. We have ---the only land based super volcano in the world here in America. It traditionally has gone off about every 600,000 years. Last time it went off was 630,000 years ago.So it is due


If/when it goes off America as we know it, will be forever gone. For every thing with in a 1000 mile radius will be dead on fire or wishing it was dead. While the rest of us, over the 1000 mile radius,will probably envy the dead. What do we call this 'super-volcano' ? " Yellowstone National Park "


My point is we can worry our selves to death or we can reach as many kids as we can in an effort to inspire them 'to be builders,who think like leaders ' Because no matter what America looks like 5,10,15, 20 or even 50 years from now.


What will be required is strong, courageous leaders who heroically inspire others to not only meet the challenges of those distant days, but to build upon those challenges as Americans from 1776 on have always done.


Nothing about the future will be easy and perhaps, that is good. Because the 'easy way ' has left us with far to many lazy people, unable to make their own way today and that just has to stop.

Contango

Re: "What will be required is strong, courageous leaders who heroically inspire others,"

Ever see those lists referencing who American youth admires?

They're mostly entertainers or politicians.

Here's one:

http://www.gallup.com/poll/15958...

Where's the business owners, the entrepreneurs, the scientists, the mathematicians, et. al.?

They're mostly pilloried by the Left as "greedy" and "uncaring" and then society wonders where are all the jobs?

I'm familiar with Yellowstone.

I sometimes wonder when I'm travelling by New Madrid, MO if I'll be around it for the BIG ONE. :)

E. TX is pretty seismically inactive.

Cliff Cannon

Contango : Tell me when youth didn't love performers ? Plato, who obviously, knew quite a bit about teaching said " There is no animal harder to train than the boy " ( paraphrased a bit )


Apparently worse ( from his perspective ) is this thought : " You can take the spiritual temperature of the boy, by marking his music " ( again some paraphrasing )


So what's new ? Besides, considering how many girls chased Elvis or the Beatles or...... Who wouldn't want to be an entertainer ?


Still, there is the wise few who understand Elvis needs a manager or he needs a building to perform in or a promoter to run his tours or a record label to release his work or....


So my point shall remain the same considering our youth. Try to inspire them to take charge of the messed up world, we've left them. Help as many of them as possible to see that " necessity is the mother of invention " Because, we all know they are going to need to be inventers.


Further, I am not in the discussion between you and ' kURTje'. Yet, I do think beyond all doubt that a vast number of young people look to the ol' geezers of our generation for guidance & approval. So here's hoping, we give it.


" Reelsfoot Lake " in Tennesse, where I delivered furniture too a resort at,is a very weird lake. One look's at it as though it is a 'regular 'lake great for skiing, swimming, etc. It is of course, basically useless for those purposes.


For it is loaded with cypress trees, which of course even after they die, leave their stumps in the water for about, well, forever. Worse,you can not come close to counting all the snakes ( yuck ! ) and as I understand it, a number of them are poisonous.

Still, it is a world class fishing lake, that is indeed beautiful and obviously, the New Madrid earthquake played a major role in filling or forming it. ( Depending on your point of view.) Which is to say, long term, not all natural disasters are bad things

Contango

Re: "messed up world, we've left them."

No guilt here.

I have and do reward someone monetarily who has done a good job, while also throwing compliments amply around when that is not possible or is impractical.

IMO, every generation largely lives in a "recency" mindset and tends to believe that History began on the day that they were born.

They tend think that they're smarter than the idiots that went before and thus continue to make mistakes similar to the last batch.

Through my experience and study, I've concluded that technology changes, but human nature doesn't.

Though I hold a minor in History, my knowledge of the Revolutionary War is a bit sparse. I recently started reading, "Angel in the Whirlwind."

http://www.amazon.com/Angel-Whir...

I recommend it.

Parallels can be made with today regarding an overbearing "out-of-touch" bureaucracy and unreasonable taxation.

Funny how what "goes around, comes around."

Cliff Cannon

Considering it is our most important war. I wish I knew why the fighting hero's of the Revolutionary war apart from George Washington pretty much disappeared from American consciences. To be replaced in large part by Civil War and of course, W.W. 2 hero's.


One traitor who I never forgot is charles lee ( note the small letters)Personally, I think he should rank very close to Benedict Arnold.


I even developed the habit of spitting on the ground to remember him, every time I crossed the George Washington bridge back into New Jersey. For the simplest reasons. The name of the town is " Ft.Lee "


Enjoy your book, your Sunday and know that I for one never doubt----" what goes around, comes around "

Cliff Cannon

@ TOPGUN01 & Scranton Tibbs : Amen

hit the road jack

You are correct! and Obie was going to be the one to review all these trade agreements with no good news 5 years later.

Contango

As a percentage of U.S. GDP, manufacturing hasn't changed that much over the last few decades.

What has changed is that more value-added products are being manufactured.

The low-skilled, high-paying jobs are GONE, never to return.

In their place are high-tech, high paying jobs and robots.

Production that was shipped off-shore is slowly returning to the U.S. due to higher transportation costs and wage increases for foreign workers.

However, the production that is returning is mostly performed by robots.

Overturning free trade agreements like NAFTA ain’t gonna change much of anything.

methodman

Too bad those low skill high paying jobs are gone.

methodman

Too bad those low skill high paying jobs are gone.

TOPGUN01

IT BLOWS MY MIND BOTH PARTYS HAVE RUN OUR COUNTRY IN THE GROUND!!! AND MOST STILL DON,T GET IT?STOP AND LOOK AT WHAT WE GIVE TO ALL THESE OTHER COUNTRYS IN AID !MONEY WE DO NOT HAVE?LETS PULL ALL OUR TROOPS OUT AND START THE WAR ON DRUGS.START WITH MEXICO!

Fromthe419

I agree with your anger, but Foreign Aid constitutes less than 3 percent of our current budget. 53 cents of every dollar currently goes to military spending (Pentagon) and the rest goes to mandatory spending. Every other thing our Government does is on borrowed money. EPA, Dept of Education, Dept of Ag, etc...it is all done with borrowed money. Soon we will have a government that will spend 100 percent of income (taxes) going to servicing our debt, mandatory spending (SSI, Pensions, Medicare/Medicaid) and have nothing left over for actual governance. The next 10 to 20 years are going to be interesting if not difficult times for all of us.

KURTje

Most younger people don't respect your generation winnie. And you wonder why. pdb

Contango

Re: "And you wonder why."

Seriously I don't.

Boo, hoo, hoo, you knew better times, whaa, whaa, whaa.

Put a pacifier in it. :)

KURTje

Naw, I'm set & help single mothers out you old man. Opps...forgot the non-Christian & non-veteran part. pdb

Contango

Re: "I'm set & help single mothers out,"

“Thanks for my government check/military.”

- kURtje,10/23/2013

"Spent the night with a single mom."

"She & I both got the maximum + she got a bonus!"

"...I was 4" thick,"

- kURTje (Oct. 12, 2013)

Sure reads like you're "set" (needing a taxpayer handout) as well as being a misogynist (no decent man would write about a woman like that in a public forum).

Go peddle your craziness to someone who cares.

KURTje

So glad you noticed. Imo it IS self-centered people like you who hurt America. Since you like most pick & choose what you write about others & self, it only further validates prior conversations. Thanks for paying me btw

Contango

“My Glock is my sweet.”

- kURT, Dec. 10, 2010

Your TRUE love.

Go peddle your craziness to someone who cares.

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