by Max Marbut
Staff Writer
“No matter what you look at, things were going south.”
Those were the words of David Altig, senior vice president and director of research at the Federal Reserve Bank of Atlanta, speaking Wednesday to the Economic Roundtable of Jacksonville.
He said the Federal Reserve will release figures Friday showing orders for durable goods and new orders were down severely in March, primarily due to slow sales in the automotive sector. The first quarter of 2008 also accounted for the worst decline in the residential real estate economic indicators since 1981.
“The data is not surprising,” said Altig, who added, “I’ve given up all pretense of avoiding the word ‘recession.’ The question is not whether the economy is weakening. The question is how fast and how bad?”
He pointed in particular to the latest figures on private non-farm employment as a barometer and described employment as the historically “clearest marker available” to determine the direction of the nation’s economy.
“It looks like it has during other recessions. It’s downright ugly,” said Altig.
He pointed out that long-term unemployment has been on a rapid rise as people who lose their jobs are finding it more and more difficult to become employed again.
“That’s not the sort of statistic we want to see,” he said.
Altig said there may be some signs of the downward turn bottoming out, particularly when it comes to existing home sales, but prices are continuing to decrease and, “All analytical models are down and not showing any signs of improving.”
When asked what effect he thinks the $150 billion economic stimulus package will have on the economy, Altig said he’s not optimistic that it will have much impact at all.
“It’s clear if you look at the history that temporary tax reduction programs have little effect,” he said. “It worked in 2001, but that time it was coupled with more permanent tax reductions. This time, it’s coupled with what will surely be tax increases. I think people are more likely to pay down their credit card debt (than spend their economic stimulus check).”
Those were frank comments from one of the people who analyzes and helps guide America’s fiscal health and future. That’s what the Economic Roundtable of Jacksonville is all about, said its President Peter Wynkoop.
“The organization was founded in 1975 and ever since, we have offered a forum for discussion about economic issues. Our missions are to foster communication and improve education about the economy and economics as a subject,” he said.
Wynkoop added the organization is an affiliate of the National Association of Business Economists and membership is open to anyone whose work or interest is in the field of business economics. The group meets several times each year and invites top experts in the field to share their knowledge with the members. At least once a year, the meeting is held at the Jacksonville Branch of the Federal Reserve Bank of Atlanta, as was the case Wednesday.
The Economic Roundtable is headquartered at the Davis College of Business at Jacksonville University. For more information, call Wynkoop at 662-7261.