A new economic report says the U.S. economy will grow steadily over the next two years and create more than 5 million jobs.
The prediction comes from University of Michigan economic researcher Daniil Manaenkov and colleagues who say economic growth will increase significantly and will reach 2.7 percent in 2014 and speed up the following year.
He said growth was hampered by tax hikes and cuts in government spending, which slowed some economic activity. But those problems are easing.
"The baseline strength of the economy has always been there, but we just had a couple of different sources of headwinds. And we don't expect them to continue, so that is the major reason for the outlook upgrade," said Manaenkov.
U.S. unemployment is slightly over seven percent now, but University of Michigan researchers predict it will fall to about six percent over the next two years as economic growth improves.
Meanwhile, analysts at Credit Suisse say global growth is “gathering steam” but remains “slow and unsteady.”
Former British Prime Minister Sir John Major, however, an advisor to the large Swiss bank, said the United States will grow more quickly than other developed nations.
He spoke in an interview on the firm’s website. "They [the United States] have their problems, they have a huge debt position, but the trajectory of bringing debt down is very attractive now. They’re becoming more and more self-sufficient in energy, which will add to internal confidence, and animal [improved] spirits.”
At the same time, the Organization for Economic Cooperation and Development says it is worried that political bickering in Washington and slowing expansion in emerging markets could hurt global economic growth.
OECD Secretary-General Angel Gurria said his group and other international economic agencies have been cutting predictions for the rate of world economic expansion. His remarks come from an interview on the agency's website.
“Here we see numbers which have been downgraded, every time when it was our turn we would downgrade, and the IMF would downgrade, the EU would downgrade, everybody has been downgrading the numbers now for some time,” said Gurria.
That leaves the OECD’s prediction for global growth at 2.7 percent this year and 3.6 percent next year, a few tenths of a percent lower than their prediction half a year ago.
Gurria said the world is still feeling the effects of the economic crisis, seen in low growth, high unemployment, rising economic inequality and falling trust in government and other major institutions.