Though often considered the most serious of discussions, economists bantered Friday about jobs, inflation and the recovery under way, referring to the ensuing comeback in terms of a well-known cereal brand.
Job growth has "snapped" into forward gear, corporate profit is starting to "crackle" to life and together those will lead to the "pop" of a full-blown economic recovery, said George Benson, the dean of the University of Georgia's Terry College Business, playing off the ad phrase for Kellogg's Rice Krispies.
The jokes continued: "Inflation by all accounts is a little bit like Elvis in that there are a lot of reported sightings year in and year out but all unconfirmed," Mr. Benson told more than 200 city and business leaders at the 14th annual Georgia Economic Outlook Luncheon at Radisson Riverfront Hotel Augusta.
He was joined on the speakers' dais by Mark Vitner, the senior economist for Wachovia Corp., local businesswoman Charlene Sizemore and Augusta Mayor Pro Tem Willie Mays.
With businesses starting to invest, spend and earn more, Mr. Benson sees the state economy growing 4.2 percent this year, up from 2.9 percent last year. He expects the national economy to grow 3.5 percent in 2004. Mr. Vitner's crystal ball showed an even rosier result, with the national economy growing as much as 6 percent.
Other favorable signs include continued low interest rates and a pickup in hiring, albeit a modest one.
While both economists served up a buffet of attractive tell-tale indicators, Mr. Benson cautioned that government-subsidized health care, the specter of military base closings and a suffering manufacturing sector might limit gains.
Medicaid, the health program for the poor and disabled, is draining state coffers and will run a deficit this year of $172 million, he said. And the prospect of shutting down 25 percent of the country's military installations next year could also eat into the $22 billion that Georgia's 13 posts are estimated to generate.
Then there are jobs. Unemployment is expected to rise from 5 percent to 5.3 percent, as the number of people looking for jobs increases faster than the number of new jobs. That said, Mr. Vitner expects Augusta to create 4,000 jobs this year, compared with 1,000 in 2003.
Still, most of the manufacturing jobs lost to advances in technology or moved overseas won't come back, prompting Mr. Benson to call the jobless recovery a "job loss" recovery. One in five Georgia factory jobs has disappeared since 1998, accounting for 100,000 layoffs.
Following up on this, Mr. Vitner said to expect more manufacturing job cuts, especially in the hard-hit textile industry.
"About the only thing that's going to be left in textiles in Georgia is going to be the carpet business."
"About the only thing that's going to be left in textiles in Georgia is going to be the carpet business." - Mark Vitner, a senior economist for Wachovia Corp.
Reach Matthew Mogul and James Gallagher at (706) 724-0851 or email@example.com.
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