Managing Editor
A former Barnett Banks economist in Jacksonville is leading the 2,300-member National Association for Business Economics and says the group’s consensus is that the recession ended almost a year ago.
“Our forecast is that a national economic recovery has been under way for nearly a year and will continue through next year,” said Lynn Reaser, who serves as president of NABE through October.
While the growth won’t be as robust as it’s typically been after a steep recession, she said it should be above the trend.
“The economy appears to have enough momentum to have the expansion continue through 2011 and probably 2012,” she said.
A double-dip recession seems unlikely this year, she said, with a probability of less than 25 percent. The recession began in December 2007 and lasted an estimated 18 months.
Bankruptcy filings should ease as well.
“The rise in bankruptcies this year was to be expected, given the loss in jobs, incomes and wealth. Both unemployment and bankruptcies, however, are likely to start to edge lower in 2011 as the job market slowly improves,” said Reaser.
Reaser was Barnett’s chief economist from 1996-2000 and went on to become chief economist of the Bank of America Investment Strategies Group until 2009. Jacksonville-based Barnett merged into NationsBank, which then merged with Bank of America.
Reaser, who holds bachelor’s, master’s and doctoral degrees in economics from the University of California, Los Angeles, recently became chief economist of the Fermanian Business and Economic Institute at Point Loma Nazarene University in San Diego.
The institute launched in January. “It’s a chance to do my own thing and do applied research. It’s a great opportunity to really practice some entrepreneurial skills and work with some great people and do economics in a useful way for people,” Reaser said in a telephone interview last week.
As president of NABE, whose local chapter is the Economic Roundtable of Jacksonville, Reaser leads an organization of the nation’s leading economists. She is frequently interviewed in the national media, including The Wall Street Journal. Her Point Loma bio says she delivered 100 client presentations a year at Bank of America along with 200 to 600 media interviews annually.
During her interview with the Daily Record, Reaser said that economic gains should be supported by a pickup in consumer spending, a firming in the housing market, a rebuilding of inventories and strong business spending on equipment and software.
“The improvement in sales and profits should be enough to support more jobs in coming months with a gradual reduction in the unemployment rate,” she said.
She said the recession probably ended in the middle of 2009 as gross domestic product, which is the value of the goods and services produced by the nation, began rising.
Reaser said Northeast Florida’s economy appears to be recovering along with the rest of the country, with some improvements in the housing market and consumer spending, gains in international trade, continued growth in health care and better prospects for tourism. However, the path to recovery “will not be even.”
“The economy never moves in a straight line,” she said.
Nationally, she said companies might have overreacted last year by cutting staff too aggressively and now are slowly finding they need to increase staff to serve their customers and produce the goods they need to provide.
“They are still cautious,” she said.
She expects moderate growth this year.
The Northeast Florida unemployment rate is higher at 10.7 percent than the national rate of 9.7 percent.
The Gulf oil spill might drive tourists from the Gulf states and Florida’s west coast to Northeast Florida, she said. “The Panhandle and the whole western part of Florida could be affected, depending on how serious the drift of oil will be down the state. Northeast Florida will probably gain some tourists in a deflection from those areas,” said Reaser.
Reaser also said the largest risk to the nation’s economy stems from the budget deficit and growing federal debt, “which are likely to keep growth below our long-term potential due to higher interest rates.”
Reaser said she hopes to visit Jacksonville soon. She said she considered some opportunities for positions in Jacksonville, but that the institute “was the one that worked out.”
She makes presentations and is available to do so in Northeast Florida. “Just waiting for the invitation,” she said.
National economists: ‘Recovery approaches one-year anniversary’
• Growth expected to be 3.2 percent for 2010.
• Recession ended June 2009.
• Pent-up demand and inventory building is important.
• Credit concerns ‘eased somewhat.’
• Jobless rate to decline to 9.4 percent by yearend and 8.5 percent in 2011.
• Dollar will retain much of its recent gains.
Source: National Association for Business Economics
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