Economists predicted a slow recovery and continued consumer caution at the fourth annual Economic Forecast Breakfast on Tuesday.
The breakfast, sponsored by Wells Fargo Bank and Augusta State University’s Hull College of Business, featured Dr. Simon Medcalfe, Dr. Tom Cunningham and Dr. Jonathan Leightner. Medcalfe and Leightner are professors at ASU and Cunningham is vice president, senior economist and regional executive for the Federal Reserve Bank of Atlanta.
What has made this recession even more sluggish than others, Cunningham said, is how worldwide the economic woes have been.
“We’re so interconnected now,” he said. “If we’re not doing well, it trickles down and vice versa.”
High unemployment rates and contracting business sectors have consumers hesitant about making any unnecessary expenditures, but Cunningham said that’s exactly what could jump-start the economy.
“People get concerned about their long-term financial safety and as a result, they end up not consuming,” Cunningham said.
The economy is full of uncertainty, he said, but things could be a lot worse.
“Buy a bunch of stuff, and we’ll all be better off,” Cunningham said with a laugh.
Most sectors in the Augusta community have been shrinking over the past 10 years, Medcalfe said, except education and health services and professional/business services sectors. Those two sectors have added jobs, and make up the majority of jobs in the Augusta area.
The overall number of jobs has fallen 4.5 percent over the past 10 years, but Augusta has the second best rate in Georgia after Warner Robins’ 2.5 percent jobs lost.
“We’re still a lot better off than most of the country,” he said. “Next year is still going to be rough, it’s still going to be tough to find jobs but our two biggest sectors are growing and adding jobs.”
Leightner specializes in the Asian economy, and gave some perspective as to how China has been affected by the United States’ economic recession. China currently has nearly $2 trillion in reserves of U.S. currency.
He estimates that the value of the dollar would fall at least 44 percent if China sold its reserves.
“China is out for China, and China would do it,” he said. “Who can buy $2 trillion? No one. But if they do drop as much as possible, they elevate their standings.”