Hope and jobs

Optimism is breaking out among economic forecasters. I admit, I share their optimism, as should be clear from my recent posts. My optimism is bolstered by the latest Index of Leading Economic Indicators, which rose in November for the fifth straight month and by the most (1.1%) in eight months.

Two of the big banks cited in today’s New York Times article (first link) predict 4% real GDP growth for 2011, i.e., fast enough to actually reduce the unemployment rate. Unfortunately, as Princeton’s Alan Krueger suggests in the article, that would only be enough to make a modest dent in the unemployment rate. Does the Times still run those “Remember the neediest” taglines, I wonder?

Much as I think recovery is already underway and will pick up steam in 2011, I can’t stop thinking that this recovery, like most recoveries in the past several decades, is likely to leave millions of Americans behind. Will the new Congress care? My main hope is that Republicans’ love of all things voucher will extend to relocation vouchers for the unemployed, to encourage them to move from places like Detroit and Upstate New York to where the jobs are.

P.S. The second link, from 24/7WallSt.com, includes a helpful discussion of the Conference Board’s index of ten Leading Economic Indicators, namely what they are and how some of them might be more like coincident or lagging indicators. The index is still useful, but there’s a reason why nobody is able to extract airtight forecasts from it.

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