Thursday, September 16, 1999
Economists see local, national slowdown
BY JOHN J. BYCZKOWSKI
The Cincinnati Enquirer
The U.S. economy's growth will slow next year, and the Greater Cincinnati economy will follow right along, according to a local economic forecast. But that doesn't mean recession, said David Hehman, executive vice president for the Federal Home Loan Bank of Cincinnati.
Slowing from about 4.0 percent growth this year to less than 3.0 percent in 2000 puts the nation on the “long-term trend rate” for the economy, which is just fine.
Mr. Hehman is among seven local economists who form an economic advisory committee sponsored jointly by the Greater Cincinnati Chamber of Commerce and the Partnership for Greater Cincinnati. They released their forecast Wednesday.
This is the 10th forecast written by this advisory group. For the past few years, one thing has been consistent: The economy has been stronger and inflation weaker than they've projected. That's been true of economists nationwide.
For 2000, the panel expects growth nationwide of 2.8 percent, down from 3.7 percent this year.
February will be the 107th
month of the current expansion, making it the longest in the nation's history.
“Needless to say, economists are in uncharted waters here,” Mr. Hehman said. Turning points in the economy — from expansion to recession — are “most difficult to predict,” he said.
The improvement in overseas economies is a double-edged sword for the U.S. economy, the panel said. U.S. exports should improve, meaning more manufacturing jobs. But the weakening of the U.S. dollar against foreign currencies makes imported goods more expensive, which could raise prices overall.
The local economy is expected to grow 3.2 percent in 2000, compared with 2.8 percent nationally. University of Cincinnati economist Tom Zinn said this is because manufacturing makes up a larger share of the local economy than nationally. Growth in output generally — because of higher exports, for instance — will have a greater impact locally.
The panel also expects the work force to grow by 1.8 percent in 2000, down from 2.2 percent in 1999. Manufacturing employment continues to grow in Greater Cincinnati even as it declines nationally, and that will continue next year.
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Economists see local, national slowdown
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