A White House report predicted on Thursday the US economy would start producing job growth this year at a rate of 95,000 per month, but that the unemployment rate would remain high.
US President Barack Obama’s annual economic report to Congress said there appeared to be an end in sight to a period of steep job losses stemming from the worst recession in decades.
However, the report also said that the unemployment rate may not come down much from the current level of 9.7 percent and may even rise because of labor market growth and the return of more discouraged workers to the labor force.
The White House forecast, most of which was released with budget documents a week earlier, calls for GDP growth of about 3 percent this year an average unemployment rate of 10 percent.
“Because projected GDP growth is only slightly stronger than potential growth, relatively little decline is projected in the unemployment rate during 2010,” the report prepared by the president’s Council of Economic Advisers said. “Indeed, it is possible that the rate will rise for a while as some discouraged workers return to the labor force, before starting to generally decline. Consistent with this, employment growth is projected to be roughly equal to normal trend growth of about 100,000 per month.”
Christina Romer, who heads the president’s economic council, told reporters she expected the trend on job creation to turn position “by the spring.”
The report projects more robust job growth next year, averaging a gain of 190,000 per month, to bring the average unemployment rate down to 9.2 percent for the year.
The report said that because of a huge economic stimulus and other measures, the economy is on a growth track again.
Romer said the president began his term last year with the economy in a deep crisis and has made progress in restoring growth.
“The economic challenges facing the nation when President Obama took office were among the greatest in our history,” she said. “But as great as the immediate challenges were, our country’s economic problems were also deeper and more long-standing.”
In his economic message, Obama renewed his call on Congress to pass a jobs bill that includes tax relief for small businesses and other measures. Obama also said more needed to be done to bring down record budget deficits weighing on the economy.
“For growth to be truly sustainable — for our prosperity to be truly shared and our living standards to actually rise — we need to move beyond an economy that is fueled by budget deficits and consumer demand,” the president said.
“In other words, in order to create jobs and raise incomes for the middle class over the long run, we need to export more and borrow less from around the world, and we need to save more money and take on less debt here at home,” he said.
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