Nov. 18, 2010
BOSTON -- The economic outlook is precarious – but New England is weathering the tepid economy better than the rest of the country.
That’s the word from the New England Economic Partnership (NEEP), which released new forecasts for the nation and for the region on Wednesday at the Boston Federal Reserve Bank.
Overall, the report said the national economy is still recovering, but it’s losing steam. Economic growth is slowing because the impact of the fiscal stimulus is fading, and because the European debt crisis has rattled the stock market.
Mark Zandi, chief economist at Moody’s Analytics, was the keynote speaker at Wednesday’s conference. He said the road ahead will be bumpy.
“The next six, nine, perhaps twelve months will be uncomfortable,” Zandi said – but said he doesn’t think the economy is headed back into recessions.
“We’re not going to double dip. But the odds of a double dip are high. I subjectively put them at 1 in 3. 1 in 3. That’s too high,” Zandi said, “Uncomfortably high.”
Things aren’t quite as bad in New England according to Ross Gittell, an economist at the University of New Hampshire and vice president of NEEP.
“It’s going to be slightly less uncomfortable for the New England region. But it will still be uncomfortable,” Gittell said.
Out of all the states in the region, Massachusetts is expected to have one of the strongest economies. At the peak of the recession, the Bay State lost about 170,000 jobs. NEEP says the state is on track to recover those jobs by the beginning of 2013.
But NEEP acknowledges its projections are optimistic. The forecasts are based on the assumption that the national economy will pick up in about a year -- and that it will fully recover in five years. But that’s not the consensus view. Many economists believe that unemployment will remain quite high for another decade. If that’s the case, Massachusetts would have to wait much longer to get back to pre-recession job levels.