Power Breakfast: Economic forecasts all over the map, Atlanta foreclosures jump, Toyota, Obama’s health summit

Economists can be all the over the place when predicting the future — a fact that AJC staffer Michael Kanell proves once again in reporting on four forecasts for 2010.

Predictions about the unemployment rate are spread between 9.5 percent and 10.5 percent — a wide gap when you’re talking about jobs.

And the Dow Jones industrial average could fall 9 percent or rise 12.1 percent, depending on which forecast you subscribe to.

Kanell pointed to Yogi Berra, who said predictions are hard — especially about the future.

Also in the AJC:

In other media:

8 comments Add your comment

TnGelding

February 8th, 2010
7:33 am

My Colts prediction was good for one quarter. All you need is a forum. I’d tend to go with the more optimistic economic forecasts.

Spanky Spankmeyer

February 8th, 2010
8:11 am

Just more of O-Dumb-dumbs mess.

Steady As She Goes

February 8th, 2010
8:16 am

I speak with a lot of Owners/CEOs of small to middle market companies. A few are doing well, working 24/7, watching every penny and finding alternative ways to sell their goods. A few others have hit the wall and have very little alternative but to shut their business down (mostly because of imports). Most are in the middle, where they are losing money and feel they are continually beaten down by all the outside influences. Market – Big guys giving away overseas product at minimum pricing. Government – Local, state and federal taxes, fees, regulations, oversight, etc. Capital – Financial institutions having tightened up with little or no equity capital for their size companies.

Many seem like dear looking into headlights. Their spirit has been hit hard but most want to find a way out of this. They just can’t find it yet. No one really supports them. They are characterized in the media and politics as bad people, greedy, and un-caring to their employees when all they are trying to do is compete in the maketplace with the people they can find and make a return on their risked investment. Most have risked a lot of money in their companies. I know that no companies are perfect but these are the people that are trying to use american talent to create, produce, distribute and sell american goods and services. Its a shame that they carry much of the tax burden of this society but get very little credit for their risks and contributions to providing jobs.

Henry Unger

February 8th, 2010
8:45 am

Appreciate your very thoughtful comment, Steady As She Goes.

Ron

February 8th, 2010
9:54 am

Most predictions and forecasts are based on historical data, trends, and experiences. In other words, we try to predict future behaviors from on past information, indicators, trends, and behaviors. Much of the time this forecasting strategy works. It works because behaviors (market, customers, consumers) tend to be cyclical. Therefore, they are predictive. But sometimes something happens that disrupts the cycle. Something comes along that significantly changes the trends and behaviors. That’s where we are in this recession. This isn’t our daddy’s or granddaddy’s recession. This thing is the perfect economic storm and all the past indicators, trends and behaviors are not helping us understand the magnitude of this storm much less when and how it will end.

TnGelding

February 8th, 2010
12:35 pm

Will it end? Let’s hope so. It’s a near miracle we’ve come this far with unemployment so high. Look up the economic census of 2002 and 2007 (still being compiled) and you might change your mind about “small” businesses.

Ron

February 8th, 2010
1:48 pm

TnGelding – Rest assure, this recession will end. Now, when will it end or will it get nastier before it ends is anyone guess. Right now the real unemployment numbers are roughly 17-18 percent. That’s a lot of people out of work. That’s a lot of people cutting back on necessary spending, cutting off discretionary spending, putting off major purchases, not paying bills on time, defaulting on debt and etc. Moreover, this number of people in financial crisis adds to the general fear in the marketplace so much that even folks with jobs are cutting back and pinching pennies. As a result, this fear impacts everything – government, business, non-profits, academia, religious institutions, and even the DJIA. And, it keeps us in economic recession.

The troubling issue is that there are no jobs for these folks to fill. The truth is that business efforts to reduce labor costs (through technology, outsourcing, off-shoring, and improved productivity) is paying off. The fact is that business needs less people to operate (please don’t shoot me I’m just the messenger). Therefore, established businesses will not necessarily be recalling or hiring significant numbers of the unemployed. I think others (in government and business) realize this and are suddenly promoting small business development. Because they honestly see that this where many of the current unemployed will be assimilated back into the workforce. The problem here is that we’ve created this hostile business environment (particularly toward small business) that will stop/discourage many would-be entrepreneurs in their tracks. And this ain’t easy to fix because it involves changing rules, regulations and legislation.

So, to sum all this rambling up this is what I see – through efforts to cut business costs we’ve put a lot of folks out of work. These folks can no longer contribute to the economy. In fact, they’re a burden on the economy. The solution is to put them to work in small businesses. But through regulation and legislation we’ve hampered and discouraged folks to start small businesses. The net effect of all of this is that we’re now in a perfect economic storm and we may be here for a while.

TnGelding

February 9th, 2010
6:07 am

We certainly need to make it cheaper and simpler to run a business in this country.