With the stock market up close to 100% from its March 9, 2009 low and with modest GDP growth for the past year and a half, economists are starting to see a rosier outlook for 2011. Leading economists are forecasting 3.5% GDP growth this year, and Federal Reserve officials are forecasting as high as 4% growth. While 3.5% growth is not exactly indicative of boom times, and even though predictions can be wrong, it is still reason for guarded optimism about the American economy. However, this growth probably will not be enough to make a dramatic shift in the labor market. Economists expect the unemployment rate to continue to trend lower, but it will be trending slowly.
These growth numbers, coupled with a modest, normal inflation forecast of 2.5%, make 2011 the most economically optimistic year in recent memory. While the U.S. economy still has a long way to go to make up for the losses of the past few years, 3.5% growth is a good start.