Floyd County (The Tribune)
Economy not likely to rebound much in 2010
IUS Economic Outlook provides financial predictions for next year
The eye of the economic storm may have passed, but that doesn’t mean recovery will be swift next year, financial forecasters predicted Friday morning.
For more than 30 years, Indiana University Southeast and Indiana University Kelley School of Business have sponsored the Economic Outlook breakfast. In 2008, professors and business minds anticipated a rocky 2009 and this year’s prediction also was somber as told before a sold-out crowd.
“We expect 2010 to be better,” said Bill Witte, co-director of the IU Center for Econometric Model Research and a retired professor.
He was one of four panelists that spoke Friday.
“The bad news is 2009 has been pretty awful, so better doesn’t necessarily mean good,” he said.
Nationally, Witte predicted unemployment rates will peak at 10.5 percent, if not higher, next year. He said the jobless rate will still hover around 9 percent by the end of 2010.
When the U.S. came out of a recession in 1983, the economy grew by more than 8 percent that year. Witte said frailty of the financial market will lead to economic growth of only about 3.5 percent next year — not much of a bounce back following a recession.
The three driving forces of the economy — household, business and government spending — are all reeling and will make recovery slow, Witte said.
He expressed his disdain for federal government bailouts, as the private sector could likely recover faster without interference, he said.
“Historically, there’s been rapid recovery after a recession,” Witte said. “This time around, coming out of this financial debacle, you have to wonder.” Jobs are considered the backbone of the economy — and while it’s expected to better the national trend — the forecast is for unemployment levels to stay elevated in the Louisville metro area, including for Floyd and Clark counties.
The underlying reason for the jobless rate is less consumer spending, according to Uric Dufrene, Sanders chair of the IUS business school.
“The consumer is now saving more, and spending less,” he said.
Even those with jobs will be more conservative with their earnings, he said.
“These high unemployment rates will discourage spending,” he said.
Dufrene anticipates a new consumer model will emerge. He predicted the jobless rate will remain above 8 percent in Louisville metro next year.
Retail sales this holiday season, exports and car sales will be indicators as to how much the economy recovers next year, according to James Smith, co-director of the IU Center for Econometric Research and an IU Kelley corporate finance professor.
While he agreed with the other panelist that recovery will be slow — a
U-shaped pattern if plotted on a graph — he said Indiana has faired better than many of its neighboring states during the recession.
“Indiana has almost been an innocent bystander caught in the crossfire,” he said. “It has been bloody, but not quite as bad as other states.”
He said Indiana has added about 9,000 jobs in the last two months, which leads to some optimism.
But those that have lost positions in the automotive industry likely will need to be retrained as their jobs are probably gone forever, said John Boquist, Edward E. Edwards professor of finance at IU Kelley.
“Hopefully we can provide enough new jobs in Indiana that people won’t be frustrated and leave,” he said.
With people spending less, Boquist said he is concerned the next sector to take a hit will be commercial real estate, such as malls and shopping stores. A weakened dollar also has scared some countries away from buying U.S. debt, Boquist said. The Asian sector — including China — owns 43 percent of U.S. debt, he added.
“They are starting to show resistance to buying any more,” Boquist said.
And the Federal Reserve is also unlikely to pickup more debt, he continued.
The national deficit — padded by bailouts — sapped Witte’s confidence that the economy will be better beyond 2010.
“Frankly, I don’t see much of a way out,” he said.
- Floyd County (The Tribune)
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THE TRIBUNE BRIEFS: March 11, 2010
The Floyd County Extension Homemakers Scholarship Program deadline is March 15.
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Owner of dogs that attacked neighbor’s pet faces fine
A New Albany man has been charged with violating two city ordinances after his two pit bull mix dogs attacked a neighbor’s golden retriever and then ran into their home. Albert Cross, 40, of the 1900 block of Culbertson Avenue, was charged by New Albany-Floyd County Animal Control with harboring a dangerous animal and harboring an animal with no license.
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Man involved in standoff faces felony charge
A Sellersburg man faces one felony and two misdemeanor charges following a two-hour standoff with police Tuesday night.
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New Albany mayor comments on possible school closures
After meeting with New Albany-Floyd County Consolidated School Corp. Superintendent Bruce Hibbard regarding the proposed budget reduction plan, New Albany Mayor Doug England released a statement Wednesday afternoon.
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Public hearing on sewer rate increase tonight
New Albany City Councilman Jack Messer plans on being all ears at tonight’s public hearing over a proposed sewer rate increase.
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Settlements reached in Floyd Co. Jail lawsuit
Settlements have been reached to pay 46 of 48 inmates named in a lawsuit against the Floyd County Jail, which alleges the jail staff failed to protect them from staph and MRSA infections, according to attorneys for the plaintiffs. The lawsuit, filed as Walker v. Floyd County in the U.S. District Court in February 2007, alleged that inmates were left to dress the infectious wounds of other inmates and that medical staff would routinely dismiss symptoms as “spider bites” and refused to enter cells to treat infected inmates.
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TRACKING GRADUATES:
A new tool will help Indiana high schools track the performance of their graduates in college, including figuring out which ones needed extra help in courses and which ones didn’t.
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THE TRIBUNE BRIEFS: March 10, 2010
The Board of Public Works and Safety will host the annual spring clean up at New Albany’s two municipally-owned cemeteries — Fairview and West Haven — March 15.
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Engineer: Daisy Lane can be finished this year
Unless there’s a substantial delay in right-of-way acquisition, the remaining phases of the Daisy Lane project should be finished this year, New Albany officials said Tuesday.
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New Albany’s Mathes Pharmacy burglarized
A New Albany pharmacy was burglarized Monday night by at least two men who wore hoods over their faces to conceal their identities, according to a New Albany Police Department news release.
- More Floyd County (The Tribune) Headlines
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THE TRIBUNE BRIEFS: March 11, 2010


