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Although the nation’s economy has started to improve this fall, the next two years will bring only moderate economic growth, generating just enough jobs to slowly reduce unemployment, economists at U-M say.
“Job gains have picked up a notch, consumer sentiment has recouped about half the ground lost this summer and the chances of another downturn have diminished,” says Joan Crary, assistant research scientist with the Department of Economics’ Research Seminar in Quantitative Economics.
“History shows, however, that it is much more difficult to recover after a financial crisis like the Great Recession than it is after a more typical recession, and policymakers are still struggling with ways to restore balance to the economy. It seems likely that the path of this recovery will continue to be a marathon, not a sprint.”
In their annual forecast of the U.S. economy, Crary and RSQE colleagues Daniil Manaenkov, assistant research scientist, and Matthew Hall, graduate student research assistant, predict economic output growth (as measured by real gross domestic product) of about 2.5 percent in both 2012 and 2013 — up from this year’s projected 1.8 percent growth.
