Predictions 2013: Unemployment Will Fall Below 6 Percent:
The U.S. economy is turning around. Albeit slowly but surely, the conditions for expansion are ripe in 2013 and the sluggish pace of growth could result in a sharp increase in gross domestic product in the second half of the year. (See our prediction for 2013 GDP here).
Forget about labor participation issues- the economy is actually getting better.
Tory Capital is ready to unveil our first prediction of 2012. Unemployment may drop to below 8 percent in the year 2012. This forecast for unemployment falling is based on current trends related to wages and initial jobless claims. Tory Capital Analytics shows unemployment becoming less of an issue in the U.S. economy although it may remain slightly higher than historical levels and stay way above 4 percent. We are aware of many analysts and economists who disagree with this economic data forecast and it will be revisited in June 2012 when we look at the half year numbers. We haven’t seen forecasts from this year that unemployment will be back above 9 percent this year? (We will link our article to these forecasts if/when they are available.) We strongly doubt this and have closely monitored the double dip theories that have largely subsided.
This Year’s Prediction:
We believe unemployment will ball below 6 percent this year but we aren’t certain if it will stay there. This is a bold call but our preliminary evidence from Asia, Europe and emerging markets confirms global growth is occurring – but how did we do last year on this prediction? Here’s our prediction from last year when ‘pundits’ were focused on the labor participation rate.
Recent jobless claims numbers show the U.S. economy has been resilient even with immense partisanship in Washington. This bodes well for unemployment numbers in 2013. Transports are up, the banking sector is strong and housing is in an uptrend. Our call last year was for unemployment to fall below 7.7 at election time and we got it right. Look for unemployment below 6 percent at some point in 2013.