General Assembly’s fiscal forecaster foresees ‘another jobless recovery’ (Triangle Business Journal)
Thursday, September 17, 2009, 1:07pm EDT | Modified: Thursday, September 17, 2009, 1:14pm
by Lee Weisbecker
Rays of sunshine might be peaking through the economic storm clouds, but General Assembly fiscal researcher Barry Boardman is forecasting only limited growth over the next four to six quarters.
“The latest expectations are that the recession is over, but it will continue to feel like we are still in a recession,” Boardman writes in a September 2009 forecast released this week.
As signs of recovery, Boardman points to various studies by the Federal Reserve Bank and others showing an improvement in manufacturing orders. Additionally, he adds, increased government spending has been having some short-term beneficial effects.
Yet, he says, “employment has yet to respond to the improvement, though layoff announcements are fewer and monthly job losses are smaller than they were a few months ago.”
Recovery, he adds, will depend in large part on the return of consumer demand, which has been battered by tight credit, the “destruction of household nest eggs,” unemployment and concerns over job security.
“Coming out of the 1981-82 recession, economic growth was at 6 percent, nearly twice the long-term rate. This time around, weak consumer demand will undercut the potential for a robust recovery,” Boardman writes, adding that the state’s unemployment picture “will remain bleak as yet another jobless recovery takes hold.”
Employment in the state’s traditional manufacturing sectors such as textiles and furniture will be very slow to recover, Boardman says. However, “new economy” industries like high-tech manufacturing and research-based industries “may help lead the state to a recovery,“ he concludes.
