Perhaps Taylor Swift should look to the woes of the U.S. economy for her next chart-topper.

Her songs might include “We are Never Ever Getting Back to Full-Employment” or “QE Stay Stay Stay.”

The catchy tunes might help people understand that  it is going to take a long time for the U.S. economy to heal after the battering it has taken. And the government’s role, specifically how to ease out of ultra-low interest rates and QE (quantitative easing), will be critical to that recovery. QE is shorthand for the different techniques the Federal Reserve has used to stimulate the economy.

These are among the messages University of Central Florida economist Sean Snaith delivers in his second-quarter U.S. forecast released today. (To read the entire report click here.)

“Taylor Swift’s songs are inspired by a lengthy string of romantic disappointments that seem more fitting for a wistful 70-year-old than a young woman of 23,” Snaith said, noting his young daughters have schooled him on all things Swift. “Kids get her messages. Maybe if Taylor takes a swing at singing about lessons learned about the economy, people will get it.”

Snaith said the uncertainty people feel about the economy – as measured by the Economic Policy Uncertainty Index – is falling. And that’s a good thing, because the more certain businesses and consumers are about economic policy, the more likely they are to spend, hire and invest. Snaith also notes that the housing industry is improving and that job growth is slow, but steady. These are all good indicators, but there are still threats to the economy.

Because the economy is global in nature, the continuing European Union crisis still threatens the United States’ slow recovery.  And while jobs are being created, getting back to full employment – or at least under 6.5 percent – is a long way off. It could be 2016 before we get there (nine years after the start of the Great Recession), if we get there at all. Some economists argue that perhaps the new full employment rate would be a higher unemployment rate than in the past.

And if businesses shift from full-time employees to part-time employees as a way to respond to the Affordable Care Act, which mandates health insurance, the job picture could be as chaotic as a Swift-Harry Styles reunion.

“Although the Taylor Swift song ‘I Knew You Were Trouble’ was not inspired by the Affordable Care Act, it could just as well be applicable when it comes to the potential impacts that healthcare reform may have on the U.S. labor market,” Snaith said.

Some of the highlights from the forecast include:

  • Real GDP growth in the 4th quarter of 2012 was revised up to 0.4 percent, a dramatic slowdown from the 3rd quarter of 2012. This lost momentum and sequestration will slow growth in 2013.  1st quarter growth of 2.4 percent will be the fastest of the year but will slow again to 1.3 percent in the 2nd quarter. The second half of 2013 should see average growth of 1.7 percent.
  • Real consumer spending is expected to grow an average of 2.5 percent during 2013-2016 and it should steadily accelerate over this period.
  • The housing market will steadily improve through 2016. During 2013-2016, housing starts will rise from 961,333 in 2013 to 1,554,357 in 2016. Levels that year will be 75 percent of the 2005 peak for housing starts.
  • Payroll employment growth remains sluggish. Payrolls will only expand 1.4 percent in 2013 and 2014. Growth rises in 2015 to 1.8 percent and settles to 1.6 percent in 2016. From 2013 to 2016 payrolls will rise by 1.6 percent on average.  This translates into an average monthly gain in payrolls of 209,086 jobs through the end of 2016.
  • Unemployment rates (U-3) are expected to gradually fall to 6.4 percent in the 4th quarter of 2016. Underemployment (U-6) remains a serious problem and currently stands at 13.8 percent.
  • Snaith is the director of UCF’s Institute for Economic Competitiveness. He is a national expert in economics, forecasting, market sizing and economic analysis who authors quarterly reports about the state of the economy. Bloomberg News has named Snaith as one of the country’s most accurate forecasters for his predictions about the Federal Reserve’s benchmark interest rate, the Federal Funds rate.

    Snaith also is a member of several national forecasting panels, including The Wall Street Journal Economic Forecasting Survey, CNNMoney.com’s survey of leading economists, the Associated Press Economy Survey, the National Association of Business Economics Quarterly Outlook Survey Panel, the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters, the Livingston Survey, Bloomberg U.S. Economic Indicator Survey, Reuters U.S. Economy Survey and USA Today Economic Survey Panel.

    The Institute for Economic Competitiveness strives to provide complete, accurate and timely national, state and regional forecasts and economic analyses. Through these analyses, the institute provides valuable resources to the public and private sectors for informed decision-making.