Economists Predict Job Growth in 2011

Analysts see up to 3 million more Americans returning to work this year.

January 06, 2011

NEW YORK - A CNN Money report earlier this week highlighted the optimistic views of financial analysts who foresee "more jobs and a self-sustaining recovery" in 2011.

"We're looking at some leading indicators on employment, and they're all flashing green lights," said Bernard Baumohl of the Economic Outlook Group, a Princeton, N.J., research firm.

CNN said its survey of economists revealed a forecast of roughly 2.5 million jobs added to the U.S. economy this year, with several predicting more than 3 million jobs added. The most conservative estimate pegged the number at 1.8 million jobs, double the pace of hiring in 2010.

While even the top estimate won't decrease the unemployment rate by a significant amount, the analysts said the hiring boom could stimulate the economy and provide relief for a significant portion of Americans, generating a self-sustaining wave of activity.

"Once things get moving, they feed on themselves," said Bill Cheney, chief economist for Manulife Asset Management, who forecasted up to 3 million new jobs this year. "There is so much pent-up demand. People have been frugal for three years. There will be a lot of new cars, a lot of new furniture, a lot of people moving out of their parents' basement."

CNN said job creation could help the struggling housing market as well as stimulate spending, too.

"Jobs feed income and income feeds more consumer spending. Consumer spending hasn't come back in a meaningful way compared to other recoveries," said Brett Ryan, economist with Deutsche Bank.

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