American Economics Group, Inc., Forecasts U.S. Economy to Recover; Midwest Will Lag Behind.Business Editors WASHINGTON--(BUSINESS WIRE)--June 19, 2001 The U.S. economy will grow substantially faster in the second half of the year, with real GDP Real GDP This inflation-adjusted measure that reflects the value of all goods and services produced in a given year, expressed in base-year prices. Often referred to as "constant-price", "inflation-corrected" GDP or "constant dollar GDP". rising an estimated 4% compared to approximately 1 1/2% in the first half, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Michael K. Evans, Chief Economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the at American Economics Group, Inc. (AEG AEG Aeger (Latin: Sick) AEG Allgemeine Elektrizitäts-Gesellschaft (Common Electricity Company) AEG Aircraft Evaluation Group AEG Association of Engineering Geologists AEG Air Expeditionary Group ). Those gains will reflect an increase in consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. caused by the sharp decline in interest rates so far this year, plus the rebate rebate, partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. checks to be distributed next quarter. However, most of these gains will be reflected in higher productivity and some recovery in profit margins rather than rapid gains in employment. Total non-farm payroll Non-Farm Payroll A statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics intended to represent the total number of paid U.S. workers of any business, excluding the following employees: - general government employees employment will rise only about 450,000 over the next six months, while manufacturing employment will decline another 250,000. As a result, the unemployment rate will increase from its current level of 4.4% to 4.9% by November. The following tables show the change in the unemployment rate, total employment, and manufacturing employment for 13 large states over the next six months. These forecasts are based on a comprehensive macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. and regional forecasting model that Dr. Evans recently developed at AEG. Forecasts for other states are available on request. The biggest increases in the unemployment rate will continue to occur in the Midwest. In spite of concerns about the energy crisis and the high-tech meltdown meltdown Occurrence in which a huge amount of thermal energy and radiation is released as a result of an uncontrolled chain reaction in a nuclear power reactor. The chain reaction that occurs in the reactor's core must be carefully regulated by control rods, which absorb in California, the unemployment is expected to rise only modestly from 4.9% to 5.1%. Texas will continue to benefit from higher oil and natural gas prices, and will continue to be the only major state with gains in manufacturing employment; however, even in that state, the unemployment rate is expected to rise from 4.5% to 4.7% over the next six months. By comparison, the unemployment is expected to rise sharply in most large Midwestern states, increasing from 5.2% to 6.0% in Illinois, and from 5.0% to 5.8% in Michigan. The unemployment rate in Ohio, which has risen only 0.1% over the past six months, is expected to increase from 4.0% to 4.5% in November. While consumer purchases of motor vehicles will rebound, capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. is likely to remain stagnant stagnant /stag·nant/ (stag´nant) 1. motionless; not flowing or moving. 2. inactive; not developing or progressing. for the rest of the year. Also, export demand will be sluggish because of slower growth in Europe and Japan. Finally, low agricultural prices will also reduce employment growth in the Midwest. The Southeastern states that depend heavily on exports of manufactured goods manufactured goods npl → manufacturas fpl; bienes mpl manufacturados manufactured goods npl → produits manufacturés will continue to weaken in the second half of the year. The unemployment rate for North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. is expected to rise from 5.2% to 6.0% over the next six months, with an increase from 3.7% to 4.4% in Georgia. The unemployment rate in Virginia, while still low at 2.9%, is projected to increase to 3.6% by November. By comparison, growth will remain stronger than the national average in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , New Jersey, and Florida. Florida continues to benefit from the building boom caused by more people from the Northeast using their previous capital gains to relocate re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. to the South. Although some layoffs have occurred in the financial service sector, the cutbacks have been far less than those following the 1987 market correction Market correction A relatively short-term drop in stock market prices, generally viewed as bringing overpriced stocks back to a level closer to companies' actual values. . Finally, the bloom is off the rose in Massachusetts. A decline in the unemployment rate to an unsustainably low 2.6% last November resulted in severe labor shortages A Labor shortage is an economic condition in which there are insufficient qualified candidates (employees) to fill the market-place demands for employment at any price. This condition is sometimes referred to by Economists as "an insufficiency in the labor force. and massive wage increases in many parts of the state, causing a substantial drop-off in manufacturing jobs and a rise in the unemployment rate to 3.5% in May. A further gain to 4.5% is expected late this year.
State Unemployment Rate, %, seasonal adj.
Nov 00 May 01 %Chg Nov 01 %Chg
US 4.0 4.4 0.4 4.9 0.5
CA 4.8 4.9 0.1 5.1 0.2
FL 3.6 3.9 0.3 4.1 0.2
GA 3.1 3.7 0.6 4.4 0.7
IL 4.4 5.2 0.8 6.0 0.8
MA 2.6 3.5 0.9 4.5 1.0
MI 3.9 5.0 1.1 5.8 0.8
NJ 4.0 4.3 0.3 4.6 0.3
NY 4.6 4.3 -0.3 4.6 0.3
NC 3.8 5.2 1.4 6.0 0.8
OH 3.9 4.0 0.1 4.5 0.5
PA 4.2 4.7 0.5 5.2 0.5
TX 4.2 4.5 0.3 4.7 0.2
VA 2.1 2.9 0.8 3.6 0.7
Total Non-farm Payroll Employment, millions
Nov 00 May 01 % Chg Nov 01 % Chg
US 132.279 132.453 0.13 133.00 0.4
CA 14.703 14.821 0.78 14.94 0.8
FL 7.164 7.288 1.73 7.40 1.5
GA 4.016 4.053 0.92 4.10 1.2
IL 6.021 6.047 0.43 6.08 0.5
MA 3.349 3.363 0.41 3.38 0.5
MI 4.702 4.672 -0.64 4.67 0.0
NJ 4.022 4.025 0.01 4.04 0.4
NY 8.681 8.736 0.63 8.80 0.7
NC 3.971 3.985 0.35 4.00 0.4
OH 5.660 5.636 -0.42 5.63 0.0
PA 5.728 5.727 0.00 5.74 0.2
TX 9.539 9.648 1.14 9.78 1.4
VA 3.539 3.561 0.62 3.60 1.1
Total Manufacturing Employment, millions
Nov 00 May 01 % Chg Nov 01 % Chg
US 18.382 17.879 -2.74 17.600 -1.6
CA 1.953 1.935 -0.92 1.910 -1.3
FL 0.486 0.483 -0.62 0.485 0.4
GA 0.583 0.571 -2.05 0.565 -1.1
IL 0.941 0.922 -2.02 0.905 -1.8
MA 0.437 0.427 -2.29 0.420 -1.6
MI 0.972 0.945 -3.27 0.925 -2.1
NJ 0.459 0.451 -1.74 0.453 0.4
NY 0.869 0.848 -2.41 0.830 -2.1
NC 0.775 0.750 -3.22 0.735 -2.0
OH 1.083 1.061 -2.03 1.045 -1.5
PA 0.923 0.903 -2.12 0.887 -1.8
TX 1.088 1.094 0.55 1.100 0.5
VA 0.386 0.379 -1.81 0.376 -0.8
For further information about the macro or regional forecasts, contact Michael K. Evans at 508/398-3847 or mevans@americaneconomics.com. For further information about AEG products and services, contact Michael P. McDermott at 508/836-0166 or mmcdermott@americaneconomics.com. |
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