What’s Next For Economy? More Jobs? Recovery? [AUDIO]
Thanks to the last minute deal reached in Washington, we didn't go off the "fiscal cliff," so what's next for the economy?
Rutgers economist James Hughes says, "The pace of economic recovery will continue through 2013- some short-term uncertainty has been eliminated, we now have a permanent tax structure in effect - however there are other looming issues going forward that may still inhibit the economy from accelerating - we have debt ceilings that are going to have to be dealt with, we have confrontational issues among the parties."
He points out, "A robust economic recovery is probably not in the cards, but the job growth patterns of the last two years have not been that bad - we need to add about a million jobs per year to account for labor force growth and to lower the unemployment rate- the last two years have averaged about 2 million jobs per year…that has helped to lower the unemployment rate - but we still have significant unemployment issues - we still need another 2 years of strong job growth to bring it down substantially."
Hughes says the bottom line here is that, "it's not going to be both guns blazing economic growth- it's going to be measured progress as we proceed through the year - in fact we may have a slowdown in the first quarter because of the increase in social security taxes - which will be taking more than a hundred million dollars out of the economy -but after that, we may well see a pickup, if we can avoid some of these other so-called cliffs in the future."
He stresses moving forward "it's going to be more of the same - we've had some fluctuations in growth during 2012 - we'll probably see the same thing in 2013, but overall we have had measured job growth, sufficient enough to keep the unemployment rate declining and we will see that basic pattern continuing."