Tuesday morning’s front-page headline in the Arizona Republic exclaimed Arizona Recession Over. The first paragraph of the lead story said, “The longest recession since the Great Depression is officially over – across the United States and, by many economists’ accounts, in Arizona.”
Minutes after reading the headline, I was on my way to the Arizona Biltmore, where I had the privilege of attending the “SRP Economic Forecast 2011” at the Arizona Biltmore, co-sponsored by the Phoenix Business Journal. Eight hundred-plus attendees laughed together as we gathered for the early breakfast meeting. That’s because having all read the headline, we laughingly wondered what else we could learn in the next 2 ½ hours.
As it turns out, we learned a lot.
Stephen K. Happel, Professor of Economics at Arizona State University shared . . .
- 360,000 jobs have been lost in Arizona since December 2007
- Arizona’s current 9.7% unemployment rate is the highest in 25 years
- Arizona’s poverty rate is now at 21%, second highest in the nation
Nevertheless, Happel makes the following projects for Arizona’s 2011 economy . . .
- 5.7% retail growth
- 1.7% wage growth
- 1.5% population growth
- 28.9% growth in new single family housing starts
The uncertainties that still “hang” over Arizona’s economy include . . .
- SB1070, and the fallout won’t be finished until the Supreme Court makes a decision
- Will the national economy improve?
- Will the “Bush tax cuts” be allowed to expire
- The state still has a $1.2 billion structural deficit
- Will the AZ legislature make the right cuts, or will they wreck the economy?
Don Reynolds, Global Economist and Futurist, offered his views on the unsettled national and global economic picture. His observations included . . .
- We are in a recovery. It’s not as fast as you want. But it’s a real genuine recovery.
- The trend is up and the worst is over.
- There will not be a “double dip” recession.
- Global economic growth is 5%
- It appears the “Bush tax cuts” will no be rescinded.
- The sovereign debt crisis is being managed.
- The Supreme Court appears to have answered the question of the “carbon tax.” We may not like the answer, but now we know what it is.
Corporate America is sitting on $2 trillion in cash, and it’s not doing anything because of too many uncertainties, including . . .
- Hyper partisanship in politics
- The undiscovered costs of the Obama health care bill
- The $11 trillion national budget deficit
- The unfunded liability of social security and Medicare
His other observations included . . .
- Bernanke is fighting the wrong war. He’s trying to create liquidity. It should be to stimulate the economy.
- There will be real national economic growth of 2% in 2011.
- We are looking at structurally higher unemployment for many years. It would take 300,000 new jobs per month for 5 consecutive years to get the unemployment rate back to 5%, and that won’t happen.
