Experts: Michigan's Recovery to Lag Nation's
date: March 1, 2011
SOURCE:The Detroit News
Michigan will keep trailing the nation during a slow economic recovery that could continue four more years, two economists said Monday.
"After
three very lean years, I think 2011 and 2012 should be good years" for
the national economy, said Mark Zandi, chief economist for Moody's
Analytics at a Detroit Economic Club luncheon. "I think (Michigan) still
lags, but you'll see some growth.
Diane Swonk, chief economist at Mesirow Financial, a Chicago-based financial services firm, agrees. In Michigan, "I think you'll see some pick up in employment," Swonk said.
Zandi and Swonk said they are "optimistic" about the auto industry's
recovery but remain skeptical that it will create enough jobs to help
revive the local economy.
"The question is how many jobs will it create in Michigan?" Swonk said.
Other economists such as Dana Johnson of Comerica Inc. and those at the University of Michigan have projected Michigan will have positive economic growth this year and add jobs following several years of recession.
Both
Zandi and Swonk are more bullish about the national economy, even with
rising gas prices and the price of oil flirting with $100 a barrel.
Zandi
of West Chester, Pa.-based Moody's Analytics said he expects
unemployment nationwide to fall "firmly below 9 percent at year's end."
The current rate is 9 percent. And he predicts gross domestic product,
or economic output, will rise 3.7 percent this year and next.
But
it won't be until 2014 that the nation's jobless rate recovers to a
stable 5.5 percent and is better able to increase jobs, he said.
Oil
prices are a looming concern in light of lost production in
violence-torn Libya and other North African countries, Swonk said, but
they won't derail the long-term recovery. "I don't think we'll be stuck
with $100 barrels of oil forever," said Swonk, who forecasts a 3.5
percent rise in GDP this year, to be followed by a slightly bigger
increase next year.
But business owners who rely on gasoline in
their supply chain — most firms — will need to compensate for the
short-term price hike, Swonk said. These include florists and barbers
who will have a difficult time passing on those costs to consumers, she
said.
Jaclyn Trop/The Detroit News