Signs point to long, multi-year recovery.
The U.S. economy is headed on a long and slow path to economic recovery, James Glassman, managing director and senior economist with JP Morgan Chase, said in a presentation to the Kenosha Area Business Alliance last week at the Club at Strawberry Creek.
Although third quarter GDP figures were not released publicly at the time of the presentation, Glassman said he believed they would be in the 3.5 percent range. Last Thursday, the U.S. Commerce Department confirmed that number.
“In my view, there is nothing fundamentally wrong with the economy that has not been fixed,” Glassman said. “This (economic crisis and recession) was all about financial panic. That set off the storm last fall.”
Both the stock market and credit markets have shown significant signs of recovery across the globe, Glassman said, which is helping to fuel recovery in other sectors.
“The credit market is recovering faster than any of us expected,” he said. “Anybody who depends on credit – things are opening up for them. The auto industry, they’re starting to do a little better. Anybody in international trade – if you were importing or exporting it was extremely difficult to get credit. That’s improving very dramatically. Those who are depending on trade are seeing a very distinct improvement. There is a feeling from all of the music that we’re hearing all over the world – it looks harmonious and makes it look like something real is happening.”
The national unemployment rate remains near 10 percent, and Glassman believes it could rise higher before the end of the year. However, be believes employment will begin a long recovery in 2010.
“We have seen a lot of improvement in the capital markets, but it will take a long time to get the economy back to full employment,” he said. “It could take much of a decade to get back there. We should be at five percent (unemployment) or below, that’s what the fed says. Hopefully by the end of the year we will have seen the end of this. If the economy is growing in the 3.5 to four percent range and it continues to grow, we should see unemployment leveling out and by the end of the year we should see (the increases) end.”
For a video interview of Glassman with BizTimes reporter Eric Decker, click below.
