Economy May Expand 3.2%, Add 2.4 Million Jobs in 2011, U.S. Chamber Says
The U.S. economy will expand by 3.2 percent this year and add 2.4 million jobs, Chamber of Commerce President Thomas Donohue said as the nation’s largest business group offered an optimistic forecast for 2011.
The biggest Washington lobbying group, which sparred with President Barack Obama in the past two years over health care and environmental regulation, pledged to work with the administration to push ahead with trade agreements, boost infrastructure spending and cut the national debt.
“We are cautiously optimistic that the recovery will continue and pick up steam as the year progresses,” Donohue said in a speech at the Chamber’s Washington headquarters. “It’s a very fragile kind of economic growth, depending on what happens in the interim.”
Donohue’s growth forecast exceeds the median 2.6 percent in a Bloomberg survey of 81 analysts. The U.S. added 1.1 million jobs in the 12 months through December, according to the Bureau of Labor Statistics.
Sluggish job growth probably will persist as companies operate without the employees they let go during the recession, and corporate acquisitions may accelerate, which might contribute to further jobs cuts, Donohue said.
Donohue has in the past year led criticism of the Obama administration for what he called a “tsunami” of new regulations on financial services, health care and the environment. While new rules were proposed, his members prospered.
Corporate profits in the third quarter of 2010 exceeded the 2006 high, according to data compiled by Bloomberg. Optimism about the economy among chief executive officers of the nation’s largest companies rose in the fourth quarter to the highest level since the start of 2006 as they projected increased sales, investment and hiring, according to a survey released in December by the Business Roundtable.
Donohue placed a sign saying “Jobs” on the front of his group’s headquarters, across Lafayette Park from the White House in Washington. Today, he said uncertainty about new regulations is prompting executives to hold back on hiring plans. Companies shouldn’t be prodded to hire more American workers, he said.
“The most important thing to tell a company is to return a reasonable return to their investors,” Donohue said.
Donohue said that he will work with the administration and members of Congress to develop long-term solutions to the budget deficit in order to avoid a “fiscal path that leads to only one destination -- insolvency.”
He also joined the administration in urging greater funding for roads, ports, airports and other infrastructure, putting him at odds with congressional Republicans. The business group will “pull out the stops” to get Congress to pass a free-trade agreement with South Korea, Donohue said.
The Chamber outlined several irritants with the administration.
A new consumer financial protection agency may end up curbing lending to consumers and businesses, he said. The Environmental Protection Agency is moving to cut carbon emissions through government regulation, and proposed Labor Department rules could boost union organizing, Donohue said.
“We must rein in excessive regulation and reform the regulatory process,” Donohue said. “In recent years, we have seen an unprecedented explosion of new regulatory activity.”
Bruce Josten, the Chamber’s chief lobbyist, said: “We’re drowning in a regulatory overload mode.”
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