4/23/2012 - Asheville-area jobs, economy projected to grow
by Dale Neal - Asheville Citizen Times
ASHEVILLE -- Economics has been dubbed "the dismal science" and more than a few experts always forecast doom and gloom ahead for jobs and business, but economist James. F. Smith remains ever optimistic.
Smith, the chief economist for Parsec Financial Weath Management here, has been a fixture for the past quarter century at UNC Asheville's annual Crystal Ball. Along with David Berson, of The PMI Group, Smith polished his prognosis for the economy Thursday, dismissing the pessimists who see only pain and problems ahead.
"The most basic truth that these pessimists ignore is that the U.S. economy is much more commonly growing than shrinking," Smith wrote in his April outlook. "Almost every economic indicator is pointing to growing strength in the U.S. economy."
That includes job creation, which has been lagging since the Great Recession ended in 2009.
Numbers released Friday by North Carolina's Division of Employment Security support Smith's argument for an improving outlook. The state's unemployment rate dipped from 9.9 percent in February to 9.7 percent in March.
That's down from 10.4 percent in March 2011, and a whole point down from 10.7 percent last September. For the year, the job picture continued to look a little better for Tar Heels, with the private sector adding 37,000 jobs, according to N.C. Department of Commerce Deputy Secretary Dale Carroll.
Nationally, unemployment was 8.2 percent in March, down from 9.1 percent in August.
"Unemployment is steadily going down, but we have to be patient. We took really big hits (in job losses) in 2008 and 2009," Smith said Thursday. "So, we probably won't get back to where we were then until mid-2014."
Berson said long-term unemployment with workers out of the job market for two or three years does pose problems. Many of those worked in industries that have been hit hard by globalization. "We have to concede that some people have been hurt by free trade, but we've not been very good at helping those workers. The winners in free trade are so much better off, that they should be willing to help the losers become winners as well. We haven't done a good job with that," he said.
Smith projects the economy to grow by 3.4 percent in gross domestic product this year. "That will be exactly double what we experienced in 2011," he said.
Smith doesn't discount the problems ahead. Congress is at a stalemate, faced with expiring taxes in December, cutting Medicaid and Medicare reimbursement, a long delayed highway bill, another fix on the Alternative Minimum Tax, or just passing a federal budget, which the Senate has failed to do for the past three years.
No wonder Congress proves so unpopular in polls. "I saw one poll that showed 9 percent approval of Congress," Smith wisecracked. "I just want to know who are those 9 percent."
Despite those problems, Smith remains sanguine "because they usually work out," he told the 200 people at UNCA's Lipinsky Auditorium.
"Congress can usually be expected to do the right thing after they've tried everything else," he quipped.