The Manufacturers Alliance/MAPI Quarterly Economic Forecast predicts that inflation-adjusted gross domestic product (GDP) will expand by 2.9 percent in 2010, followed by 2.6 percent growth in 2011. The forecast is down slightly from the previously estimated 3.3 percent and 2.9 percent, respectively, in the May 2010 quarterly report. By supplying major assumptions for the economy and running simulations through the IHS Global Insight Macroeconomic Model, the Alliance generates unique macroeconomic and industry forecasts, the association said today.
The MAPI forecast also posted a sharp cut in job increase expectation.
MAPI forecasts overall unemployment to remain high, averaging 9.6 percent in 2010 and 9.4 percent in 2011. Manufacturing is expected to see a hiring increase, albeit less than previously anticipated. The sector is forecast to add 277,000 jobs in 2010 and 373,000 jobs in 2011, although the numbers are down from 400,000 and 500,000, respectively, in MAPI’s May report.
If those numbers are correct, the ability of the economy to add enough jobs to offset long-term unemployment is nearly zero. That, in turn, means that Congress will be pressured to increase expenditures on unemployment insurance. Compassion and economic growth will be pitted against austerity again.
Douglas A. McIntyre