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Tuesday, August 25, 2009

That Little Light At the End of the Recession Tunnel is Actually Five Years Away

Posted By on Tue, Aug 25, 2009 at 11:49 AM

Last month, Macroeconomics Advisers, LLC, a Clayton-based economic consulting firm predicted that the recession should be ending just about now, with a significant caveat: We won't actually start to feel any relief until jobs start coming back.

Economist Ben Herzon told the Daily RFT he expected the job market to start expanding again sometime next year.

But now the gloom-and-doom prophets at IHS Global Insight, an economic and financial forecaster, have released a new study that predicts that, like fashion and first-run movies, job expansion won't arrive in St. Louis until well after the rest of the country. Our job market won't return to its pre-recession level until 2014 -- approximately two years past the national average.

IHS predicts that, by the end of the recession, the St. Louis metro area will have lost 64,700 jobs, 4.7 percent of the total. That's significantly better than Detroit, where 313,400 jobs have disappeared -- along with its major industry -- and Phoenix, Tampa and Riverside, California, all of which have been devastated by the popping of the housing bubble.

"Christmas is cancelled due to the recession. Have a nice day!" - FLICKR.COM/PHOTOS/10114127@N00
  • "Christmas is cancelled due to the recession. Have a nice day!"
Detroit, along with its fellow Rust Belt cities Milwaukee and Cleveland, plus Providence and Hartford, probably won't return to its pre-recession job levels until 2015, the IHS claims. The Sun Belt stands to fare only slightly better, with most areas recovering by 2013 or 2014. (Still, considering the collapse of the American auto industry, it's a wonder the IHS is predicting any sort of recovery for Detroit at all.)

But compared to Austin, Texas, which lost less than one percent of its jobs, St. Louis is in bad shape. Writes the IHS:
Of the 363 metros in the country, just one -- McAllen, Texas -- will add more than 1,000 jobs this year. While most areas will begin increasing employment again in 2010, it will be tepid, with only 118 metros crossing the 1,000-job mark next year. Solid gains will not return for the majority of the country until 2011.
The Daily RFT predicts at least another two years of employees getting told, when they ask for raises, "Just be grateful you have a job."

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