April 22 (Bloomberg) -- The recovery in U.S. manufacturing is a “bounce off the bottom,” led by inventories, said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh.
Manufacturing is growing more slowly than it was in 2006 and 2007, Hoffman said today in an interview with Tom Keene on Bloomberg Radio. “There’s a lot of inventory building that still needs to be done,” he said. “We have a ways to go.”
Manufacturing has expanded in seven of the past nine months as businesses stabilized inventories and invested in new equipment. The industrial plant use rate was 73.2 percent in March, compared with 68.3 percent in June of last year. In August 2006, it was 81.2 percent.
Hoffman said the economy will add 1.5 million private jobs by the end of the year and the unemployment rate will decline to about 9.25 percent. Gross domestic product this year will expand 3 percent to 3.5 percent, he said.
The number of workers filing claims for unemployment benefits declined last week as the recovery from the deepest recession in seven decades prompted companies to make fewer job cuts.
Initial jobless applications dropped by 24,000 to 456,000, the Labor Department said today. The total number of workers receiving unemployment checks declined, as did the number of people collecting extended benefits.
The economy lost more than 8 million jobs since the recession started in December 2007, and the unemployment rate reached a 26-year high of 10.1 percent in October. Federal Reserve Chairman Ben S. Bernanke has said the labor market will be slow to recover.
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