The U.S. economy will avoid recession in 2013, the chief of America's leading business lobby said Thursday, but won't grow fast enough to make a big dent in the nation's still sizable jobless rate.
"We believe the economy will grow throughout the year and not fall into another recession," U.S. Chamber of Commerce President and CEO Tom Donohue said in his annual State of American Business address. "On the positive side, housing is continuing to improve, Europe seems to be stabilizing, and energy prices are steady."
Despite the positive signs for the economy, the chamber predicts slow growth, with the economy expanding by just 1.5 percent to 1.75 percent in the beginning of the year, and accelerating to 2.5 percent by late 2013.
"So while our economy may be growing, it is fragile growth and not nearly strong enough to create the jobs Americans need or to expand their incomes," Mr. Donohue said.
On an issue likely to loom large early in Mr. Obama's second term, Mr. Donohue said the chamber is mobilizing with allies to support an overhaul of federal immigration policy, with a focus for the business lobby on encouraging the best workers from around the world to come here.
"Even with high unemployment, we have millions of job openings that go unfilled," he explained. "Either the workers come here to fill those jobs, or the companies take all of their jobs somewhere else."
The chamber president said he struck up a working alliance on the issue with AFL-CIO President Richard Trumka, whom he praised as the "best guy in town" at building coalitions. Mr. Donohue also said he has met with Sens. Charles E. Schumer, New York Democrat, and Lindsey Graham, South Carolina Republican, who have been involved in previous efforts on immigration legislation.
Mr. Donohue said any legislation should include increased border security, provisional visas for lesser-skilled workers and expansion of green cards for foreign nationals who receive advanced degrees from U.S. colleges and universities. He also favors a national employee verification system to weed out illegal workers, which has been a contentious issue in the debate.
The chamber head said that the new regulatory burden imposed under President Obama and the recent "fiscal cliff" tax increases are among the biggest issues that are discouraging job creation.
"On the negative side, the recent tax increases resulting from the fiscal cliff deal will hit successful small businesses hard," he said.
The suffocating regulatory environment — which includes some 4,000 new rules each year — is also holding business back, Mr. Donohue added.
"When you consider all the new rules now pouring through the regulatory pipeline, and those still to come, it is staggering," he said. "It would be hard to convince any reasonable person that all of that is really necessary."
Mr. Donohue pointed to President Obama's new health care law, rules issued by the Environmental Protection Agency and labor laws as among the top moves retarding job creation.
He would also like to see the federal government streamline the permitting process, which has been a big problem in moving forward with the massive Canada-to-Texas Keystone XL pipeline, delayed repeatedly by the administration as it studies its potential environmental impact.
"We need a predictable and fair regulatory environment," Mr. Donohue said. "The federal government shouldn't pick the winners and losers or subject energy projects to endless and duplicative reviews. Such roadblocks have stymied vital projects like the Keystone XL pipeline, which must be built."
• This article was based in part on wire service reports.
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