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Things in the economy may be looking up, but a rapid recovery isn't in the near future, according to economic analyst Richard Yamarone, who spoke this morning at the New England Business Expo in Worcester.
Yamarone, who is a TV analyst for Bloomberg, predicted what he called a "square root recovery" for the economy, meaning that we'll experience a prolonged period of moderate growth with only minor gains in employment.
But the good news, according to Yamarone, is that the U.S. economy is "no longer at the edge of Armageddon" like it was earlier this year.
Yamarone made his predictions to a room of 300 local business executives at the kick-off for the expo, which is produced annually at the DCU Center by the Worcester Regional Chamber of Commerce.
In his remarks, Yamarone downplayed the positive spin in the media of reports that the number of Americans seeking unemployment benefits is dropping off. The decline, he said, has less to do with people finding new jobs than people simply exhausting federal benefits.
Yamarone presented his own "fab-five" indicators that he uses to track the economy. They are heavily weighted toward consumer spending, because, he explained, the American economy has shifted in the last 50 years away from manufacturing towards retail. He pointed to employment numbers that show manufacturing is now only 9.5 percent of the jobs based in the United States when it was 20.8 percent in the 1950s.
Yamarone's five indicators include spending on dining out, jewelry and watches, cosmetics and perfumes, women's clothing and casino gambling. All have shown small signs of recovery, but are still at low levels.
And while there may be some good news in the housing sector, Yamarone attributed the recent monthly increases in sales to the $8,000 first-time homebuyer tax credit that is available through Dec. 1.
"I don't see how this can be a recovery," he said. "I'd be shocked if was in fact."
The housing market may not be in recovery, but it has stabilized, with prices in most parts of the country down to less exuberant pre-bubble levels of 2004.
While much of the data Yamarone reviewed pointed to a slow, painful recovery, he did highlight several reasons to be optimistic about the economy, including the massive monetary stimulus funding that is in the pipeline as well as falling energy prices and a general thawing in the credit markets.
The breakfast also included recognition of several local businesses and organizations, including: Webster First Federal Credit Union, Mass Veterans, Massachusetts Biomedical Initiatives, Worcester Center for Crafts and One Exchange Place.
The expo continues throughout the day, culminating in a business after hours-type event from 4 to 6 p.m. on the showroom floor.
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Worcester Business Journal presents a special commemorative edition celebrating the 300th anniversary of the city of Worcester. This landmark publication covers the city and region’s rich history of growth and innovation.
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