AP survey: Outlook for 2011 economy is brightening

By JEANNINE AVERSA, AP Economics 

WASHINGTON – Employers will hire more workers this year, and the economy will grow faster than envisioned three months ago, according to an Associated Press survey that found growing optimism among leading economists.

But unemployment will stay chronically high — nearly 9 percent by year's end, the latest quarterly AP Economy Survey shows. A majority of economists say it will be 2016 or later before unemployment drops to a historically normal rate of around 5 percent.

Economists have become more confident 19 months after the worst recession since the Great Depression ended. Lower Social Security taxes and higher stock prices will embolden Americans to spend more and help power the economy, they say.

"People will finally recognize that an economic recovery is under way," said Lynn Reaser, a board member of the National Association for Business Economics. "This won't be a recovery seen only by economists."

The gains this year will be enough to withstand the threats still clouding the economy, the AP survey found. A majority of the economists doubt, for example, that falling home prices and higher mortgage rates will pose a major risk to the economy in 2011.

The AP survey collected the views of 42 private, corporate and academic economists on a range of indicators. Among their forecasts:

• The economy will grow 3.2 percent this year, compared with the 2.7 percent they forecast in October. That would top last year's estimated growth of less than 3 percent.

• Employers will create a net total of 2.2 million jobs. Three months ago, the economists predicted 1.6 million jobs would be added in 2011. Last year, employers added roughly 1.1 million.

• Consumers will spend 3.2 percent more this year than last year. That's stronger than the 2.5 percent growth the economists had forecast in October. And it's nearly double the spending growth that's estimated for 2010.

• Inflation will be 1.8 percent this year, barely more than the 1.7 percent the economists forecast in the previous survey and up only slightly from 1.5 percent last year. The 1.8 percent forecast falls within the range of inflation the Federal Reserve thinks a healthy economy needs.

Among the reasons for the economists' growing optimism: an extension of income-tax cuts, a cut in Social Security taxes for workers, easier access to loans, higher stock prices and a government that seems more sympathetic to the priorities of businesses.

The brighter outlook is also evident among people responsible for hiring.

Jerry Huddleston, human resources manager of the Ozark Natural Foods grocery store in Fayetteville, Ark., said he plans to hire for busy weekend shifts because sales are improving.

The store is generally slow to add jobs. But Huddleston said business is picking up. Customers seem more willing to pay more for organic milk, vitamin supplements and pre-made vegetarian meals.

"I think people are starting to be more confident that the job they have is the job they will have tomorrow," he said.

As the economy gradually strengthens, the economists expect interest rates will tick up, as they already have begun to do. They think the yield on the 10-year Treasury note, now at 3.4 percent, will reach 3.6 percent by midyear and 3.9 percent by year's end. Those higher rates would force up mortgage rates, which tend to track the 10-year Treasury yield.

Yet when asked about a range of threats — from falling home prices and rising energy prices to state budget woes and Europe's debt crisis — the economists called each a minor risk rather than a major risk to the economy.

In the spring and summer, many analysts had feared the economy might slide back into a "double-dip" recession.

"Consumers and businesses are in a better mood," said Nariman Behravesh, chief economist at IHS Global Insight. "They are spending a little more freely. Not a lot more freely, but a little more freely."

That helps explain why Behravesh has lifted his forecast for economic growth in 2011 to 3.2 percent, from 2.2 percent in October.

Still, the Fed said Wednesday that the economy isn't growing fast enough to lower unemployment and still needs help from the Fed's $600 billion Treasury bond-purchase program. The bond purchases are intended to lower rates on loans and boost stock prices, spurring more spending and invigorating the economy.

President Barack Obama still faces risks from voters skeptical of his economic stewardship, according to a new Associated Press-GfK poll. More than half disapprove of how he's handled the economy. Just 35 percent say it's improved on his watch; 40 percent had said so a year ago.

Yet public sentiment may brighten if the economists prove correct in their forecasts. Rajeev Dhawan, director of Georgia State University's Economic Forecasting Center, has raised his estimate for growth this year to 2.7 percent, from 1.8 percent three months ago.

This year "will be better than 2010 in terms of hiring, spending and economic growth," Dhawan said. "Yet unemployment will decline only slowly. At least we're not going backward."

Proven Easy Ways To Make Money Online

By Michael C Gibson

Hi, my name is Michael Gibson. I have been making a living off the internet for the last few years. One day I finally realized how much I actually hated my job and knew at that point I had to find a new way to generate income. I tested many many different programs on the internet to make money online. So I wrote this article to share some of the information I have accumulated over the last few years. I am also going to share which system I use to make about $10,000 a month.

   1. Survey Sites: There are many of these sites such as Cashcrate, Inbox Dollars, and Project PayDay. What you do is fill out simple surveys and cash offers. The surveys can pay anywhere between 50 cents and 3 dollars. The cash offers can be anywhere between 1 dollar and 10 dollars. None of these sites are going to make you a ton of money online; however, it is a great way to make some extra spending money a month. These site's main appeal is how insanely easy they are. Inbox Dollars will even pay you just to read emails they send you. This sites are completely free also.

   2. Affiliate Marketing: This is normally where most large internet success happens. It is the best way to make a lot of money online but is also probably one of the hardest ways to make money online. How affiliate marketing works is that a site such as PayDotCom or ClickBank gives you links for special offers. You promote these links and generate traffic to these sites. When your link generates a sale you get a commission. Another great thing about this way to make money online is that you can start out for completely free. There are many free ways to generate traffic to your link.

   3. Become a Freelance Writer:You don't need any kind of English degree for this method. All you have to be able to do is write web content, short stories and other media. You will only be writing short pieces. You can sell articles on Forums like DigitalPoint and SitePoint, but don't expect to make a whole lot. Or you can sign up for a service like freelance home writers. Basically this is a place where companies post that they need an article and you can write one for them and obviously get paid. It is completely free to sign up on this site.

   4. Odesk: This is a site where companies post available jobs. It can range anywhere from something you can do in an hour to a part time job from home. One of the advantages of Odesk is just how easy it is to get paid; you can use the Odesk card or have the money directly deposited in your bank account. There are tons of job postings and the hourly pay option makes it easy to on your own time. This site is also free to sign up for and is a great way to make money online.

   5. Online Juror: There are places such as eJury and TrialJuries.Com that stage mock trials. All you do is sit on a mock jury and give your input. The Jurors get paid anywhere from $5 to $60 depending on how complex the case is. There's no guarantee you'll get a case and that is the main downfall of this system. When I tried this system it took forever before I finally got a case. Although I am from a small town. Also make sure you don't slack off on the Jury or you won't be called back. The more you pay attention and get involved, the more successful you will be.

   6. GDI: Last but definitely not least. This is, in my opinion, one of the easiest and definitely most successful systems I have ever tried. You promote the company just as you would an affiliate link and for everyone who signs up you get a dollar. Now I know that doesn't sound like a lot but GDI gives you a dollar for 5 GENERATIONS OF REFFERALS. Now let me break it down for you. Let's say you refer 5 people. Now if those people all refer 5 people then you're making 25 dollars. Now if this trend of 5 referrals continues then you will go from 25 to 125 to 635 to 3125. 3125 DOLLARS A MONTH!!!! In all honestly if you actually put some work into this program then 5 referrals is very simple. So you should be able to easily make more money than that. It does take some time though. This isn't a get rich quick program. Check it out at the link below and try the free trial.

The Best Banks You'll Never See - Internet banking

Internet banking can deliver supercheap checking and robust CD yields.

Hardly ever set foot in your bank? Maybe you're ready to take a bold step into the frontier of Internet-only banking. Your reward for leaving the neighborhood branch behind can be supercheap checking and robust yields on CDs.

Of the six banks that do business exclusively over the Internet, CompuBank of Houston (www .compubank.com) offers the best checking-account deal: free checking with no minimum balance and a minimum opening deposit of just $100. CompuBank charges no ATM fees and reimburses you for other banks' ATM surcharges--up to four per month at $1.50 each. Electronic bill-paying is free, too, along with your first order of checks. And the bank rates first in ease of use in Gomez Advisors' spring 1999 Internet Banker Scorecard

Because online-only banks have no ATMs of their own, those that reimburse you for the cost of using other banks' machines are the best bet for most consumers. Telebank  also reimburses you for four $1.50 surcharges a month if you apply for your account through Yahoo!

Virtual banks can also pass along the benefit of lower overhead expenses in the form of higher interest rates. NetBank's offerings for instance, often appear on our monthly list of top-yielding CDs (see page 56). Recently, the bank paid 5.75% on a 30-month CD and 5.35% on a six-month CD.

Most of the banks also pay far more than the average 1.2% on checking-account balances. Until next January, Security First Network Bank is paying 6% on balances. And USA Access Bank of Louisville  which caters to small-business owners, pays 4% on business checking accounts with a $1,000 minimum.

What's at risk when you bank online? Not a lot. All the banks named here are FDIC-insured. Online transactions are encrypted, and under federal law the banks bear the burden of any computer fraud. You can usually access your account 24 hours a day, and telephone customer-service hours tend to be substantially longer than traditional banking hours. You typically receive your statement online rather than on paper--but you can always print it out.

As with ordinary banks, service can be uneven. The biggest drawback: If you do have a serious problem, you can't march into a branch to get it resolved.

Tips for Saving Money on Banking Fees

For almost every service we avail, we have to pay a certain fees and banking is one of such services. Though the banking fees are never too high but people often get surprised by the surplus charges added by the banks. You can avoid most of the surplus charges just with a little savvy planning. Continue reading to know about some very useful tips to reduce the banking fee-

Net Banking- Net banking along with being easy and user friendly also reduces the banking costs to a certain extent. A few banks charge a fee for the banking with teller.

ATM Transaction Fee- First of all; look for the bank that does not charge the ATM fee, in fact you must sign up for the bank that reward the customer for using the card. When you use your debit card with some other bank you may get charged a certain amount of fees which you can avoid by being in your own bank network. Plan your monthly budget carefully to avoid these extra charges. Every withdrawal from the ATM sums up in yourbanking statements at the end of the month and year.

Compare the banks and their fees structure- Do a well refined research before signing up for a bank or before going for the transaction. You can all the local banks and search online to know about the fees of the respective banks. You can also make a spreadsheet of the fee structures of different banks. Minimum balance fee, ATM charges, overdraft fee, replacement check fees and the traveler’s checks can add up quickly and can subtract a big amount from yourbank account.

Bank Balance- You must have an adequate amount of money in your bank account to cover up all debit card and checks transactions. This indeed is one of the best ways to hoard money on pricey overdraft charge, which in due course can be a large amount. If the payment is a recurring payment or scheduled, the bank may take out the funds from your bank account twice or even more before they apprehend that you don’t have sufficient funds in your bank account. You will receive an additional fee every time the company tries to get their funds from your account.

Use different banks for personal and business use- Consider broadening your horizons by diversifying your bank accounts and you can do this by doing business with different banks. For instance, if you own a business account and a personal account, you should use separate banks for each. The fees usually are eliminated or reduced if you own both a savings and checking account in the same bank.

Foreclosure fraud: Looming issues for some of the top Banks

Bank of America, JP Morgan and Chase, and GMAC have all been in the headlines recently for bad practices with their foreclosure procedures being called into question.

With the implementation of the Obama Housing plan, Home Affordable Modification Program HAMP, it has helped thousands of homeowners, however, now we are dealing with the foreclosure mess and possibly false documents being signed by the lenders.

The foreclosure document debacle has already caused a major headache for the lenders, but this is just the beginning for the lenders as some of their investors who bought residential mortgage backed securities thought they were buying solid investments.  Lenders who have used "robo signing" procedures as part of their process are not only facing possible lawsuits, but could also be responsible for buying back the securities sold to the investors.

As we all know Bank of America took over Countrywide and they probably will have the most issues as the courts become involved.  A notice went out to Bank of America from the Federal government and also investor firms like Blackrock and Pacific Investment Management Company.  They face a possible buy back purchase of loans totaling over $18 billon dollars.

So how does this affect you in the long run? Bank of America stated about a week ago they are resuming their foreclosure process and found no fault with their practices.  If you think you are being treated unjust and are about to lose your home, you should contact legal counsel or your attorney general.  Sometimes if the state steps in, it may help to shed some clarity on your situation.  Stay on top of the latest news by following blogs and articles like the one below posted by the Wall Street Journal.

Double-Digit Inflation

Some people may tune out any talk of inflation, chalking its presence in the media up to fear-mongering (a handy scapegoat!) or laughable economic miscomprehension.  “Why worry about inflation, when deflation is clearly the threat?,” so many commentators cried a few months ago.  But if all one cares about is the short-term, then one won’t be prepared by the time the long-term arrives.  With all the money printing going on at the Fed, only two scenarios are really possible: super-inflation (in correlation with the amount of money printed, which is higher than at any other time in U.S. history) or high interest rates (to stem the inflation).

In any inflation scenario, there is a window of opportunity between the time when inflation becomes noticeably uncomfortable and when it becomes a bigger problem.  Higher interest rates step up to the plate before inflation can turn into hyperinflation.

So I’d like to consider the ways that you can prepare for what *might* be the more likely inflation scenario.  These are basic strategies which differ slightly from what you can do to protect your money from hyperinflation, so I’d suggest you consider both and integrate them into your own plan.

One simple example of inflation: when a penny is worth more as metal than as money.

When inflation starts to kick in, governments everywhere are probably going to have to respond with higher interest rates if they hope to avoid the prospect of hyperinflation.  Hyperinflation sounds extreme, but one doesn’t need to see triple-digit inflation in order for an economy to start spiraling into a hyperinflation scenario.  And more importantly, super-inflation of some form won’t be as noticeable if the inflation is exported to all other countries around the world.  Why does that happen?  It happens because the U.S. dollar is the world’s reserve currency. That’s why China, Russia, France and India would all like to see a new supracurrency to take the place of dollars.  It’s a conflict of interest, plain and simple.

**As any consumer knows, higher interest rates are bad for borrowers, but good for savers.**

The most important things you can do in preparation for double-digit inflation are to:

(1) pay off your debts and

(2) put more money into savings that pay you at rates with rising interest rates.

Pay Off Your Debts While Interest Rates Are Still Low

We may never see interest rates this low again for a very long time.  Right now central bank rates in Canada and the U.S. are both at 0.25%.  I’ve checked my credit card bills and that translates into a lot less money I would have to pay to carry a balance.

It’s always a good idea to pay off your debts as soon as possible anyway, but if you have languishing credit card debt or even if you never put extra lump-sum payments onto your mortgage, now is a good time to reconsider your strategies.

The sooner you pay off your debts with lower interest rates, the less money you will end up spending on those items you paid for with credit.

As soon as the economy starts truly recovering again, oil prices are going to rise even further, and rising oil prices always lead to inflation pretty quickly – couple that with the massive new injections into the money supply on the part of most OECD governments, and you’ve got a recipe for an inevitable increase in interest rates everywhere.  That’s because higher interest rates are the only way to stem inflation and keep a country’s currency from depreciating.

Move Money Into Inflation-Protected Investments

Put your money into something that will “float with the rising tide,” as I like to say.  Some vehicle that pays you an increasing amount based upon the increase in inflation.

TIPS – These are American Treasury Inflation-Protected Securities.  These pay interest, like other Treasuries, every six months and pay you back the principal when the note matures.  The interest paid on these is automatically increased to keep up with inflation (that is, inflation as it is measured by the CPI, which, conveniently for the U.S. Treasury, doesn’t take all price inflation into account).  While these are not ideal, some have argued that it is the best we’ve got.

Real-Return Bonds – This is Canada’s version of TIPS.  Investing in a real return bond fund or ETF means the returns reflect the cost of inflation, so that you effectively won’t lose any purchasing power when you receive your interest from these bonds.

Inflation-GICs (I-GICs) – Inflation-protected Guaranteed Investment Certificates.  These are also a Canadian product.  Like TIPS, they protect your principal while indexing the interest to inflation.  As AEGON puts it, the “Inflation GIC (I-GIC) is a guaranteed investment contract designed to provide stable value portfolios with a long-term hedge against inflation…monthly interest payments are indexed to the Consumer Price Index (CPI), providing higher returns and lower volatility during inflationary periods.”

Dividend Aristocrats of Consumer Staples – Even in an inflationary environment, people will continue to eat and brush their teeth.  Consumer staples companies such as Proctor & Gamble (NYSE: PG) or Kraft Foods (NYSE: KFT) are usually poised to do well with inflation.  They simply pass on rising costs to consumers.  This is why your food becomes more expensive – remember?  So why not get on the other side of the fence and receive some of that money back in the form of dividends.  As the company makes more money, it will often increase its dividend, too.  The difference here from TIPS and GICs is that your money is not guaranteed.  It is not without risk, since its value depends on the market and not what the government guarantees it will pay you back.

There will be other versions of these and more options in your local economy.   If you live in India, Australia, Phillipines, or elsewhere – let me know what your country provides in the way of inflation-protected investments and I’ll add it here.

There are additional moves you can make to stem off high inflation, too – but these apply in any economy as part of a good money-management strategy.  What are they?  Earn more. Spend less.  If you think we’re about to head into a period of higher than unusual inflation, it’s a good time to seek out that raise if possible, or take on another new job that pays more, if you can find one.  And it’s always a good time for retooling your budget and finding items that can be chopped or reduced.