Published: Friday, Jan. 22, 2010

Updated: Friday, Jan. 22, 2010

Recession over? Who knew?

Economist says recovery will be slow, job loss and foreclosure to continue

BRADENTON — “The recession is over — unfortunately, nobody knew,” economist Hank Fishkind told business leaders Thursday.

The recession officially ended in the third quarter of 2009, he said, but because it hit financial markets so hard, the “economic recovery trajectory is relatively slow,”

“It is going to underwhelm us,” he told those gathered at an economic forecast breakfast sponsored by the Economic Development Council.

The Orlando economist projected that 2010 will be another year of foreclosures and job losses — “2010 is going to be a miserable year.”

But Fishkind believes there are some bright spots on the horizon: an increase in housing starts and fewer unemployment claims. Yet the weekly unemployment claim report released Thursday showed a surge in filings.

The surge deflated hopes among some analysts that the economy would produce a net gain in jobs in January and help fuel a recovery. A Labor Department analyst said much of the increase was due to holiday season-related administrative backlogs at the state agencies that process the claims. Still, economists noted that would mean claims in previous weeks had been artificially low.

“We are still losing 20,000 jobs a week,” Fishkind told business and government attendees. “We have seen three years of huge job losses in Florida. The good news is that the losses are decelerating. We’re beginning to see the bottom.”

On projecting more foreclosures, Fishkind said “there are a huge number of adjustable rate mortgages coming in the first quarter.”

The economic stimulus package is working, he said, as the money continues to trickle down to local communities. It’s helping, but whether it will promote a self-sustained growth in 2011 is still in question, he said.

Higher taxes, interest rates and inflation are the worries as the economy starts to recover, Fishkind said. Increased consumer spending is necessary to grow the economy, and that won’t happen unless the job picture is stabilized.

“We are still losing jobs, and we need job growth by the spring or we won’t see sustained growth,” he said.

A 5 percent growth in the GDP should happen in the fourth quarter, Fishkind predicted. He also projected “bad housing numbers” in the next couple of months, although the value of homes has gone up in the past six months.

While Manatee County still has a way to go in digging out of its economic doldrums, Fishkind said neighboring Sarasota County has fared worse.

“Sarasota County is struggling,” he said, pointing to a 4,000 population loss in 2009 and fewer home sales than Manatee.

In response to a question about the Hometown Democracy proposal that would change the state Constitution to require voter approval of changes in local comprehensive plans, Fishkind said he thought the idea was “ill-conceived” and would be an “impediment to economic recovery” if passed.

He urged local officials to put up more money to attract large corporations to Port Manatee.

“You need real money upfront to attract major industries to the port, not just tax incentives,” he said, referring to the port’s special taxing district and Encouragement Zone.

Florida ports have to compete with surrounding states that don’t impose impact fees, said Steve Tyndal, senior director trade development and special projects. “The county commission and the port authority have helped level the playing field but there is still more work to be done.”

—The Associated Press contributed to this report.