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Business School Panelists Offer Economic Forecast for the Nation, Indiana ... the World12-30-10 | News

Business School Panelists Offer Economic Forecast for the Nation, Indiana ... the World

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A business panel sponsored by Indiana University?EUR??,,????'?????<

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Over the five quarters since the economy hit bottom, total growth has totaled only 3.5 percent. By the declared end of the recession in June 2009, private sector employment had shrunk by 6.1 percent (more than 7 million jobs), and it continued to decline after recovery began. Witte said the recovery also seems to have lost momentum.

The Kelley School panel said the economy overall will expand at about a three percent rate in 2011, between the fourth quarters of this year and the next. ?EUR??,,????'?????<

National Highlights

Joblessness will remain a challenge, with the unemployment rate for the state still above nine percent for most of 2011.
2011 will be marked by very low inflation nationally, below one percent, which will continue through the coming year, as consumer spending is expected to rise very slowly.
The housing sector has hit bottom nationally, but the large overhang of homes facing foreclosure will prevent any significant rebound in construction during most of 2011.
The Federal Reserve will maintain its near-zero position on short-term interest rates through 2011. Mortgage rates will remain quite low by historical standards, though some rise from this year?EUR??,,????'?????<
Energy prices are expected to rise moderately in 2011 in the absence of any major supply or security disruptions, with oil prices remaining below $80 per barrel.
The federal budget deficit will remain very high, and any congressional efforts to contain it will likely have an impact only slowly. State and local budgets will remain strained by slow revenue growth, the disappearance of federal stimulus spending, and weakened property values.

And the World
The world economy is expected to grow by 4.2 percent in 2011, down from this year?EUR??,,????'?????<

The starting point for the Business Outlook Panel?EUR??,,????'?????<

A similar econometric model of Indiana provided a corresponding forecast for the state?EUR??,,????'?????<

Indiana Economy
On the state level, Jerry Conover, director of the Indiana Business Research Center, noted Indiana?EUR??,,????'?????< Indiana ranks fifth nationally in the rate of job growth in 2010. Indiana has regained about 18 percent of the jobs it has lost, largely due to gains in private education and health care services and public sector employment.

Construction employment in Indiana remains near the bottom. Manufacturing, which also was hit hard, is slowly growing.

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