Job growth weighs heavily on U.S. economy
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Reasons for optimism
The good news, however, is that economists are predicting growth to the mark that will allow the economy to get over the 3 percent bump.
Moreover, some economists are particularly optimistic that firms will begin to hire this year and start to chip away at the nation's high unemployment numbers.
Bernard Baumohl, chief global economist at The Economic Outlook Group, said he believes the pace of hiring will accelerate and that the United States is facing a stronger and more durable economy this year.
"It does appear now that employers are gearing up to increase hiring in 2011, probably at the best pace we've seen in at least three years," he said.
The jobless rate will come down by year's end, he said, although it may rise in the next month or two, due to technical reasons in calculating the unemployment rate: Those who have given up seeking work are not counted in unemployment figures. So as more people feel optimistic and re-enter the job market, jobless rates could swell somewhat.
He expects the unemployment rate to fall below 9 percent, perhaps even reaching as low as 8.5 percent by the end of this year.
While companies have for many months been sitting on cash, now there is a growing confidence that the current boost is real. That means there is much less reason for companies to sit on cash, he said.
While companies have been adding jobs in recent months, they have done so in relatively low numbers. Now, those figures are expected to rise, he said.
Recent figures on corporate growth also seem encouraging.
At the end of last year's third quarter, cash held by 419 nonfinancial companies in the Standard & Poor's 500 list grew 49 percent from three years ago, which was before the start of the recession. Total debt was up 14 percent, according to The Wall Street Journal.
In the past year, cash was up 10.6 percent from 2009 levels, while debt rose 2 percent, the Journal found.
U.S. corporate profits are also up, rising 26 percent from a year earlier to 1.64 trillion U.S. dollars in 2010's third quarter, the highest in four years, according to government data cited by the Journal.
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