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Economy could grow by 2.5 percent in 2012

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By Chelsey Levingston, Staff Writer 6:06 PM Friday, February 3, 2012

HAMILTON – This year will see continued moderate economic growth of about 2 percent for the first six months, said a regional financial expert.

Jim Russell, regional investment director of U.S. Bank Wealth Management, expects the growth to pick up to 2.5 percent the last part of the year.

Gross Domestic Product — the value of all goods and services produced — grew an estimated 1.7 percent in the U.S. in 2011, Russell said. That’s the lowest growth rate in a non-recessionary time period since 1947, he said. GDP is currently $14.58 trillion.

“This is very slow growth,” he said.

However, he said “the likelihood of a second recession this year in the U.S. is very low and the likelihood of moderate growth is very high.”

Russell was the main speaker Friday of Greater Hamilton Chamber of Commerce’s annual Groundhog Breakfast on economic outlooks.

On key economic fronts such as unemployment, Russell sees modest improvements this year. Major roadblocks to economic recovery will be housing, the flexibility of the government to boost spending and the ongoing slow rate of growth, he said.

“It’s our view, frankly, the home markets on the national basis have a pretty long time to stabilize,” he said. “More locally we have had a much, much better experience.”

The U.S. unemployment rate will likely drop to 7.5 to 8 percent by the end of the year, he said. On Friday, the U.S. Bureau of Labor Statistics released its new monthly jobs report to show the country’s unemployment rate dropped to 8.3 percent in January from 8.5 percent in December.

“That’s still not enough,” Russell said.

Cincinnati’s unemployment rate is better than the nation as a whole, as it was 7.7 percent in December in the entire metro region, according to Ohio Department of Job and Family Services. Butler County’s latest unemployment rate was 7.9 percent, per state figures.

Unemployment rates do not consider people with no job who are not looking for a new job.

The region’s manufacturing strength is driving the local unemployment rates, he said. There are more jobs in Ohio, Cincinnati and Butler County tied to manufacturing than national averages, Russell said.

The 2012 Regional Economic Outlook, prepared in part by Cincinnati USA Partnership, estimated manufacturing employment grew 4 percent in the Cincinnati region in 2011.

Contact this reporter at (513) 705-2551 or clevingston@coxohio.com.

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