The economy has shown improvement and growth during the third quarter of 2010, even surpassing economists’ initial expectations, data reveals. A recent report from the Department of Commerce shows the economy grew 2.6 percent during this period, up from the 2.5 percent economists projected. As a result, the analysts have increased their growth projections for the first three months of 2011, giving consumers hope that sustainable economic recovery is on its way.
However, job seekers and homeowners may feel differently. Experts, while optimistic about the economy, have not expressed a significant amount of hope for improvements in the job market. According to economists’ data, December’s unemployment rate is likely to fall to 9.7 percent, down from it’s current rate of 9.8 percent, CNN Money reports. A minimal decline in unemployment is expected throughout 2011 as well, with analysts expecting the rate to fall to just below 9 percent by the same period next year, the news source adds.
“If you go back and look at forecasts a year ago, economists generally got growth right, but they got unemployment wrong,” RDQ Economics chief economist John Ryding told CNN Money. “We probably need 5 percent growth to significantly lower unemployment. It’s just a question of how deep a hole we’re digging out of.”
Economists have not given the housing market a positive forecast either, projecting home prices will not surpass a growth of 0.4 percent throughout the year, according to the CNN Money report.
Consumer confidence appears to have risen this holiday season, as evidenced by a significant increase in spending and many consumers reporting they have added more loved ones to their gift lists. However, the boosted spending may result solely from the holidays, raising questions regarding whether the momentum will last throughout the new year.