The U.S. economy will slow early this year from the pace at the end of 2011, then accelerate and finish with annual growth of less than 3 percent, U.S. Chamber of Commerce President Thomas Donohue said as the nation’s largest business group offered its forecast for 2012.
“America’s most pressing economic challenge is the lack of sufficient growth to create jobs, expand incomes, reduce government deficits, and fund essential programs,” Donohue said today in Washington during his annual speech on the state of U.S. business.
Growth in the gross domestic product will slow to about 2.5 percent in the first half of the year, then speed up to a rate of about 3 percent, Donohue said. Economists surveyed by Bloomberg project growth will slow in the first quarter to an annual rate of 2 percent from 3.1 percent in the fourth quarter of last year and will average 2.3 percent for all of 2012.
“If government starts removing the impediments that we have long identified as stifling growth and jobs, then it will be incumbent on business to start taking a few more risks and making some new investments,” he said.
The energy industry, “on the cusp of an energy boom,” can add hundreds of thousands of jobs in the coming years, Donohue said. Oil and gas development may create 300,000 jobs in Ohio, New York, Pennsylvania and West Virginia in the next few years, he said. TransCanada Corp. (TRP)’s Keystone XL pipeline from Canada to Texas can create 20,000 jobs immediately, and 250,000 over the course of its production, Donohue said.
Environmental Tests Passed
“The project has passed every environmental test,” he said of Keystone. “There is no legitimate reason to delay it.”
Legislation extending the U.S. payroll-tax cut that passed Congress last year requires the State Department to issue a permit by Feb. 21, too little time a full review, White House spokesman Jay Carney said on Dec. 20. Environmental groups oppose the 1,661-mile (2,672-kilometer) project. The Obama administration in November delayed the pipeline decision until 2013, citing concerns of Nebraska residents about the route across an aquifer.
“The Chamber is a pay-to-play operation, and it has been taken over by big oil companies with the biggest pockets,” Jeremy Symons, senior vice president of the National Wildlife Federation, a conservation group that opposes the Keystone pipeline, said on a conference call with reporters yesterday.
Donohue, who warned that 2012 should “not be a wasted year” during the presidential election, said the top priority for the U.S. should be creating jobs. The unemployment rate fell to 8.5 percent in December from 9.4 percent a year earlier.
Increased trade could provide more opportunities for growth, Donohue said. The proposed Trans-Pacific Partnership trade agreement with eight other nations can be completed this year, and free-trade accords are possible with Brazil, Egypt, India and Indonesia, he said.
Broadening visa programs and reducing the time required to clear U.S. Customs to 2001 levels may lead to 1.3 million jobs and $860 billion in economic benefits, he said.
The Chamber’s economic and tax policies were challenged yesterday by the Washington-based U.S. Chamber Watch, which is affiliated with a federation of five U.S. labor unions.
Leo Hindery, managing partner at the private equity investment fund InterMedia Partners LP, said on a conference call that the Chamber largely represents the interests of about 20 of the nation’s largest multinational corporations.
The tax policies advocated by the Chamber “will not incent the creation of jobs,” Hindery said on the call, organized by the group. “It will simply enrich these larger American multinational corporations.”
He said that Europe “faces an unresolved financial crisis and looming recession.”
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