January 26, 2010

Economy will see a sustained recovery

As mentioned in my column last week, we received the economic forecast for the national economy, our Georgia economy and our local economy. Dean Robert Sumichrast of the Terry College of Business at the University of Georgia spoke at Tuesday’s “Wake Up Whitfield.” The headline, according to Dean Sumichrast, is “our economy will experience a sustained recovery in 2010.”

A sustained recovery was as positive as he could put it. And although a sustained recovery is not a bed of roses or means that everything is back to normal, it is better than “we are still heading for a cliff.” After experiencing the “Great Recession,” as many are calling it, what is normal? Some have even coined a new term called the new normal. Regardless of what we call the economic period that we are in, it seems the worst is behind us. Although deep recessions are usually followed by explosive growth, this recession will be followed by very slow growth.

Dr. Sumichrast cautioned that although we will see positive economic indicators throughout 2010 with significant improvement in 2011, this recovery will not feel like recovery for a long time. Job losses and high unemployment will continue to weigh down consumer confidence and the overall economic climate throughout 2010. Georgia’s employment will decline from 3.9 million jobs in 2000 to 3.8 million in 2010. All of the jobs created over the last decade plus some will be lost by the middle of 2010.

Job losses and unemployment are a national issue, a Georgia issue, and a local community issue. Unemployment in Georgia will top out around 11 percent by mid-summer. Nationally we have lost 5 percent of all jobs in the Great Recession. Dalton will have lost more than 16 percent. Due to the issues surrounding the housing crisis, we have been hit much harder in Georgia and Dalton than the rest of the country. All the issues that have contributed to our economic plight have also hurt Georgia’s banks much more adversely than any other state. By August 2009, the Dalton MSA (metropolitan statistical area) had the highest unemployment rate in Georgia at 12.8 percent with a loss of more than 6,000 jobs.

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