Survey finds economists optimistic on hiring rate

We are see more and more reports of optimism in the business world lately.

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; employers will create a net total of 2.2 million jobs; consumers will spend 3.2 percent more this year than last year; inflation will be 1.8 percent this year, barely more than the 1.7 percent the economists forecast previously.

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