After last week’s positive jobs report, economists have been revising their forecasts to reflect a more optimistic take on the recovery. Their predictions range from continued monthly job growths to lower unemployment rate. Yet if we learned anything in the past few months, it’s to not get our hopes up.
Earlier this year, GDP revisions showing that the US economy fared much worse than predicted caught some economists off guard. The people who weren’t surprised included average Americans who have seen their expenses go up even as their wages remained the same. Intimately familiar with job listings and employment situation in their areas, they also remain skeptical of the jobs numbers and the positive forecasts that followed.
One analysis that predicts further drops in the unemployment rate came from Goldman Sachs. After the US economy added 288,000 jobs in June, they predicted that by the end of the year the unemployment rate will be 5.9% and that by end of 2015 it will be as low as 5.4%.
Even as Goldman analysts expect the unemployment rate to keep on dropping, they remain realistic about the growth that the current economy can sustain. In their opinion, monthly job gains will slow down to an average of 250,000 a month for the second half of 2014. In 2015, they have US looking at monthly gains of about 200,000 jobs.
The other piece of good news coming out of the US Bureau of Labor Statistics this week was that in May there were 4.6m job openings, which is a new high for the recovery. With job openings on the rise, hiring has remained steady, according to the May job openings and labor turnover survey.