“We’re at the point where we’re getting into a bit more of a self-reinforcing cycle of creating jobs and that is starting to generate more income and more spending,” Ryding said on a panel at the Hedge Funds New York Conference hosted by Bloomberg Link in New York. Still, job growth probably won’t be rapid enough to bring the unemployment rate down below 7 percent “in the next couple of years,” he said.
The unemployment rate probably held at 9.6 percent in November while payrolls increased by 150,000 jobs, according to the median forecast of economists before a Labor Department report tomorrow in Washington.
“The labor recovery is going to be slow,” said Ryding, a former New York Federal Reserve Bank economist. Unemployed Americans are remaining jobless longer than in previous recessions and small businesses have limited hiring because of a lack of clarity regarding taxes and health-care mandates. “We have to foster that pro-business environment.”
Ryding said it would take as many as four years to clear the excess inventory in the housing market, which is still struggling to rebound. A housing recovery is “still going to take a long time,” said Ryding.
Dennis Gartman, editor of the Suffolk, Virginia-based Gartman Letter and appearing on the same panel, said that the Midwest and rural parts of the country were recovering.
“You can see a very real change in the attitude of people around the country,” he said.
While he said he didn’t expect to see 5 percent and 6 percent economic growth again in his lifetime, he said the U.S. could “quietly” grow the economy at 3 percent and 4 percent “for a long period of time.”
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