America hasn't seen expected 'Great Recovery': Report

LOS ANGELES: An economic forecast says America's expected ``Great Recovery'' hasn't materialized and the economy's fallen short of even normal growth.

The Los Angeles Times reports the gloomy picture appears in the quarterly UCLA Anderson Forecast released Wednesday.

It says that real gross domestic product growth, the inflation-adjusted value of goods and services produced, is well below the 3-percent growth trend of past recoveries. The forecast says the country isn't creating enough good jobs.

However, the forecast also says a housing market recovery should boost the GDP over the next two years and bring down unemployment, falling to 6.9 percent next year.

California, meanwhile, outperformed the nation in job growth during a 12-month period that ended in April. One reason is demand for California goods, such as computers.

US companies add more jobs but growth disappoints



US companies picked up the pace of hiring in May, but job growth remained sluggish and fell short of economists' expectations as the goods-producing sector shed payrolls.

Separate data on Wednesday pointed to the headwinds the recovering housing market still faces as another surge in interest rates on mortgages last week drove down demand from homeowners to refinance. It was the first time in a year rates have climbed above 4 percent.

Private employers added 135,000 jobs in May, the ADP National Employment Report showed, missing forecasts for a gain of 165,000. April's private payrolls were revised down to an increase of 113,000 from the previously reported 119,000.

"The number was weak," said Mark Zandi, chief economist at Moody's Analytics, which jointly developed the report.

"The ADP (data) is suggesting instead of job growth stepping up, it's actually stepping down as we move into the summer months," Zandi told reporters. "It's not like we're falling off a cliff, it just feels like we're throttling back a little bit."

The pace of economic growth is expected to cool in the current quarter from the 2.4 percent rate seen in the first three months of the year, partly due to fiscal belt-tightening in Washington.

The goods producing sector cut 3,000 jobs in May, with a drop of 6,000 positions at manufacturing firms, which could be partially due to defense spending cutbacks, Zandi said.

U.S. stocks opened lower following the report, while Treasury debt prices added to gains. The dollar was slightly weaker against a basket of currencies.

Separate data showed labor-related costs fell in the first quarter by the most in four years, although the reading appeared to be distorted by a shift in employee compensation during the prior period to avoid a tax hike.