by David Chapman
Staff Writer
Economic headwinds and tailwinds aren’t necessarily blowing optimism across the land.
“We’ll have positive growth, but nothing to write home about,” said Jacksonville University Associate Professor of Economics Carol Dole.
Dole told The Civic Round Table of Jacksonville on Friday that the economy needs to grow by 6 percent to begin to recover and to create jobs.
Instead, she said, the economy, as tracked by gross domestic product, might grow at half that pace.
“We’ll be lucky to make 3 percent growth this year,” said Dole.
Dole told the group of civic leaders that historically, gross domestic product growth averages just above 3 percent annually but given the economic downturn, stronger growth is needed to catch up with pre-recession activity.
The national recession began in December 2007 and ended nationally in June 2009, when the economy began to grow.
People thinking 2011 could experience strong growth might want to temper their expectations, said Dole.
Dole spoke of the “certain headwinds and questionable tailwinds” of the economy.
While 2010 began at a 3 percent growth rate, she said, it slipped to around 2.5 percent and the factors are in place for “not a robust economy in 2011.”
The debt crisis both in the U.S. and Europe, a continued depressed housing market and consumer uncertainty all will affect growth, she said.
Revenue is not covering U.S. debt, she said, creating a “daunting situation we are going to have to come face-to-face with.”
“I believe higher taxes” are on the way, said Dole.
Pension issues, much like those faced by the City, are rampant at state and local levels across the country. Also, the housing market continues to impede economic progress, with the situation worsening in the coming year, she said.
Also, the unemployment rate continues high. The stated unemployment rate combined with the rate of people underemployed at part-time or lesser-skilled jobs and the number of discouraged workers who have stopped looking for jobs is reaching almost 17 percent, she said.
Holiday shopping wasn’t as strong as retailers hoped, she said, and is another indicator that people are holding onto their money instead of spending.
And while businesses might have money to invest, she said, they aren’t going to spend it unless they have confidence in the economy.
Plus, she said that employers found they could do more work with fewer people during the recession. “Firms have found out they can do the same amount of work with seven million fewer people,” said Dole.
There’s debate whether it’s fiscally wise for government to create more jobs.
To grow the economy, “we need all those people that got fired to get jobs, and government can’t hire seven million people,” she said.
Despite the slow growth news, some Civic Round Table members remained upbeat following Dole’s presentation.
“At least it’s positive growth,” said one member.
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