Still sweating the economy? Survey forecasts some relief

With these high temperatures, let's yammer about something cool, like the economy.

So curl up on a soft patch, and I'll tell you what the nation's oldest continuous survey of economists' expectations is predicting for the rest of this year and next.

The latest version of the Livingston Survey, which Inquirer columnist Joseph A. Livingston started back in 1946, finds forecasters, while not exactly giddy, raising their estimates for economic growth and seeing the unemployment rate falling.

The 35 economists who participated in the semiannual survey (now managed by the Federal Reserve Bank of Philadelphia) raised their target for real gross domestic product growth to 3.2 percent for the second half of 2011, from 2.9 percent. For the first half of 2012, growth is expected to be 3.0 percent.

As for unemployment, those surveyed now expect the rate to be 8.6 percent in December, down from the 9.2 percent they had predicted six months ago. By June 2012, the unemployment rate is seen drifting down to 8.3 percent.

On a scorcher of a day in Philadelphia, I view that as a thawing job market.

The long and rough recession and its lingering aftermath have taken a toll on Pennsylvania's unemployment trust fund, now insolvent. The state owes the federal government $3.8 billion - and counting - as it continues to borrow money to pay out unemployment benefits to the state's jobless. Obviously, the fund can't go on being broke, so a fix is needed, and Pennsylvania's legislators are working on it this week. Tucked away in the bill is a provision that seeks to reduce the drain on the system by making fewer people unemployed, period.

It's not a job-creation measure - those have dubious success anyway. It's a job-retention approach. What if, instead of a company's laying off a small group of people, it temporarily reduced hours of a larger group, moving them into part-time status? The unemployment fund would be able to help those workers make ends meet by providing a smaller benefit.

It's not ideal, obviously. But it's an interesting concept for society at large, and one worth exploring.

When someone loses a job, more than that one person's income is lost. Also lost is an investment in that person made by society and by the person's company.