Sluggish hiring is the biggest threat to an economic rebound, according to the latest Wall Street Journal economic forecasting survey. But there is a hint of good news: the economists thought the chances of a double-dip recession in the next year were low.
The dismal unemployment rate, now at 9.1%, has dampened the economic outlook for the U.S. On Friday, the stock market dipped below 12,000 for the first time since March amid worries over employment, European sovereign debt and the overall state of the global economic recovery.
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In the WSJ survey, a handful of participating economists said that the biggest threat to a recovery is the persistent slowdown in hiring, and they lowered their estimate of the number of jobs they believe will be created in the next 12 months to 2.2 million from 2.5 million. It’s the first time the forecast has been lowered since October, according to the WSJ, and 21 of 49 economists said hiring was the biggest threat to the economy. Nineteen said a sustained increase in oil prices was the biggest risk.
The economists also estimated that the jobless rate would be 8.2% in 12 months and 7.9% in December 2012, and that it would weigh down any growth in the gross domestic product from 2.3% in the second quarter from 3.2%.
While there is some growing discussion of more stimulus from the federal government (including from Larry Summers, former economic adviser to President Obama), there appears to be no sign of a significant decrease in the unemployment rate anytime soon.