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Economist: Jobless rate to improve in 3-4 months

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The Middle Tennessee economy will recover from the recession by 2014, predicted a local economist at Thursday’s MTSU Economic Outlook Conference.

David Penn, director of the MTSU Business and Economic Research Center, said it will take this long for businesses to create enough jobs for the ones lost and for the growing population.

Unemployment, which is currently 10.7 percent in Tennessee, should begin to decline in the next three to four months, he said.

“I think in the next three to four months we will see some job growth,” Penn said.

By the end of the year we will see some improvement in job loss, he said. Middle Tennessee should see increases in manufacturing and construction jobs by the first of next year.

Right now, unemployment continues to climb, but it is still substantially lower than in 1982 when the jobless rate was at 12.4 percent.

Penn said hiring in housing construction and manufacturing will lead the region out of the recession.

He said Middle Tennessee hasn’t been hit the hardest in the nation by the recession, but it has been greatly hurt because of the prevalence of manufacturing in the region.

Claims for unemployment insurance are beginning to come down, Penn reported.

“Claims peaked at 14,000 (a week) in January an all-time high,” he said. Claims are now around 11,000 a week.


C. Dowd Ritter, president and chief executive officer of Regions Financial Corp. and Regions Bank, lead off the conference speaking of what he called The Great Recession that the nation is currently in.

“(The recession) is already twice as deep and twice as long as any other recession the country has experienced,” he said.

“All across America people have experienced it or know someone who has,” Ritter added later.

Foreclosures rose more than 30 percent over the last year and unemployment rose dramatically, Ritter said.

He said today’s generation will begin to act like those who went through The Great Depression and become a generation of savers.

“Today, I think we have come full circle,” Ritter said. “Until 2030 we will become a generation of savers.”

But, he said the groundwork for recovery is in place, he said.

Housing prices, which have been declining, are now showing improvement.

Ten percent of Americans have lost their job but 90 percent of Americans are about to increase their spending.

Ritter said the jobless rate will begin to come down quickly in Middle Tennessee then the rest of the country because of the diverse economic base.

“Middle Tennessee will lead the way in the economic recovery,” he said.

Erin Edgemon can be reached at 869-0812 and at eedgemon@murfreesboropost.com.
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September 24, 2009 at 4:32pm
I wonder if those who are unbale to pay their bills share Ritter's rose colored vision for the future? In an economy where people are celebrating the loss of "only" 530,000 jobs per week I don't see a hell of a lot of reason to be optimisitic.
September 24, 2009 at 4:56pm
I don't share it at all :( I had hoped for a predictably shorter time frame. 2014?!?! I'm also aware that unemployment claims does not fully gauge the true number of unemployed out there. There are many who for one reason or another, are ineligible for unemployment, including those who worked for non-profits. As far as the housing prices coming up again? I've been watching my own yo-yo back and forth.
September 24, 2009 at 8:33pm
We need JOBS in AMERICA not CHINA and elsewhere thats the problem with the economy.
September 25, 2009 at 9:39am
He could be right, but I'll believe it when I see it. He mentioned savings, why would anybody save money when interest rates on savings accounts are around 1%. I miss the Carter error when rates were as high as 18%.
September 25, 2009 at 12:14pm
US manufacturing jobs have gone down every year since 1979 and in Tennessee they have been going down every year since the mid Eighties. It did not matter who the president was or if good times or bad. It does not matter what subsidy is given. It did not matter how many industrial parks were built along the interstate or any other factor. Tennessee has 84 square miles of empty industrial parks. To buy all of this land at $3000 per acre, manufacturing output in the state would have to expand 113 times the 2007 level.

This loss of jobs is due to increasing manufacturing productivity. The dollar value of US stuff made stays about the same fraction of world production but the number of US manufacturing jobs is declining. Manufacturing wages are increasing every year but below the inflation rate. The only thing that would stop this pattern is the average manufacturing wage falling to Wal-Mart levels or a major war between India and China. If we increase the number of manufacturing jobs it will only be a temporary increase over a temporary low point. There is nothing on the horizon that will reverse the net loss of manufacturing jobs because all of the force and fury of the economy is targeting people related costs. Along with this phenomenon is the weird idea that we need to reduce consumption of energy, toilet paper and old fashion light bulbs. Reduced consumption will mean fewer jobs.
September 28, 2009 at 11:33am

I agree with you on most points but not that "reduced consumption will mean fewer jobs." I don't doubt that it will have some impact but it won't be a reduction as much as a shift. Low tech manufacturing jobs will be traded for hi tech engineering. Look at Pittsburgh as a prime example. The decline of the steel business left the city in shambles but they are experiencing a renaissance due to an surge of tech companies entering the area. Detroit, though a long long way from the finish line, is experiencing similar success. Old parts and assembly plants are being turned into manufacturing plants for green technologies. I also think that while there are extenuating circumstances that have lead to the decline in manufacturing jobs over several decades, it's certainly not the crux of the issue now. Today's problems can be traced back to many of the tenants of Reaganomics and the idea of trickle down economics, followed by Clinton's refusal to regulate the CDS marketing, topped off by the eight years of the Bush administration's complete reign of destruction, from deregulation of mortgage and credit industries, to starting two wars, to giving substantial tax breaks to the wealthiest 1%, who did nothing to reinvest in the U.S.
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