The path to economic recovery may come in the shape of a gravy boat with a sharp decline, a long flat bottom and a tapered spout, according to economist Sean Snaith.
Like most economists, Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida’s College of Business Administration, said he believes the nation exited the recession in the third quarter of 2009, but for most people, it doesn’t feel like it.
“There’s an ugly scar on the economy right now and that ugly scar is the labor market,” Snaith said. “And it’s going to be slow to fade.”
Snaith, who spoke at the First Coast Commercial Real Estate Outlook Conference & Expo in Jacksonville today, said this recession is unlike most others that have followed U-, V- or W-shaped paths to recover because of the continued absence of job growth, home prices continuing to fall, home equity drying up, the stock market still being down from where it was two years ago and consumers putting what money they have into savings instead of spending.
Snaith expects commercial real estate foreclosures to continue to impact the market, although because the commercial market is expecting them, and preparing for them, he doesn’t expect them to be as severe as some have feared. While job growth is expected to improve in the coming months, Snaith also expects unemployment to continue to plague the market until 2013-2014. In the long term, he also expects the state’s population to grow at a slower rate than it has in the past.
But the greatest risks to the U.S. economy may come from public policy, which Snaith likened to the SkyMall magazine available during commercial flights that sell unusual and sometimes unreliable gadgets and gizmos. He includes in the “SkyMall economic policy catalog” the Troubled Asset Relief Program, the Foreclosure Prevention Act of 2008, the American Recovery and Reinvestment Act of 2009, better known as the stimulus act, and, most recently, the health care reform bill.
Some areas of the nation might see progress faster than others, Snaith said, but Florida won’t be among them.
“In Florida, we went into the recession before everybody else and we’ll come back after everybody else.”
Unemployment in Florida was 12.2 percent in January, the most recent data available. In metro Orlando, unemployment is 12.4 percent.
Source: Orlando Business Journal: Economist Snaith: Florida will be last out of recession by cconte@bizjournals.com | 407-265-2227