NEW YORK (CNN/Money) -
The White House is projecting slower job growth next year and beyond despite forecasting solid economic growth.
The president's Council of Economic Advisors (CEA) Friday forecast an average of about 133.4 million jobs in the economy in 2005, up 2.1 million for the year but down from its earlier forecast of a gain of 3.6 million.
The council also edged its job growth forecast down for 2006, to a gain of 2.1 million jobs rather than an earlier forecast of 2.3 million.
And it cut targets for 2008 and 2009, when it sees 1.7 million new jobs added each year, rather than the 1.9 million it previously projected. The 2007 forecast stayed about the same with 2.0 million new jobs expected.
The February forecast had called for the economy to create about 2.6 million jobs this year, bringing those working to an average of 132.7 million, but the final job growth numbers for 2004 are almost certain to be lower.
The White House is now forecasting just 1.4 million new jobs this year, based on an annual average compared with last year, but actual job growth will probably come in higher.
A rise of 2.1 million jobs is a relatively modest gain of about 175,000 a month. That is just above the 150,000 average monthly job gain that economists believe is necessary to keep up with the increase in population.
The council forecast gross domestic product growth of 3.5 percent next year, up from its earlier forecast of 3.4 percent growth in GDP, the broadest measure of the nation's economy. It expects growth of 3.4 percent in 2006, up from its earlier view of 3.3 percent growth. The GDP numbers are adjusted for inflation.
In a teleconference with reporters Friday, CEA Chairman Gregory Mankiw, asked why job growth has lagged economic growth, blamed increased productivity, which he said has held job growth down.
But he chose to focus on job growth, noting that "the economy has created 2 million jobs in the past year and is expected to continue to create jobs at a healthy rate."
The report forecast the unemployment rate to fall to 5.3 percent in 2005 from 5.5 percent this year. In its earlier report the CEA forecast an average 5.4 percent unemployment rate in 2005.
The unemployment rate is calculated using a survey of households, while the number of jobs in the economy is based on a survey of employers, which economists consider a more reliable method.
-- CNN's Washington Bureau contributed to this report
|
