Power Breakfast: Atlanta poised for ‘quasi-growth’, metro jobless rate dips, airport, GM Doraville, hotel tax, BP

Unemployment may rise and home sales may fall, but Atlanta’s economy is poised for “quasi-growth” the next two years, the Economic Forecasting Center at Georgia State University predicted Wednesday, AJC staffer Dan Chapman reports.

Fears of a double-dip recession and deflation are unfounded “provided we don’t have a steep drop in home values,” said center director Rajeev Dhawan, Chapman writes.

“What happens to home prices over the next few months will be critical to the confidence of consumers,” Dhawan said. “It will affect their spending decisions, especially for big-ticket items. This, in turn, will send a signal to CEOs about whether or not to ramp up their investment and hiring plans.”

Dhawan was surprisingly upbeat in his report, Chapman writes. Georgia will add a measly 5,000 jobs this year, but 60,300 next year and 78,300 in 2012. The statewide unemployment rate, currently at 9.9 percent, will remain above 9 percent, Dhawan said.

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6 comments Add your comment

The Economy

August 26th, 2010
8:07 am

This is total bunk, this economist rosy prediction is a joke. Jobs are not returning for years to come, housing values will continue to drop for another 3 yrs. Housing got us into this mess, housing will get out of this mess. His job growth % is laughable, middle wage positions are gone. You will have upper management, then you will gave the grunts working for 32-65K a year. Gone are the middle class 70-100k salaries, companies known they don’t need them anymore. There may be a lot more 40k jobs over the next few years, but that’s not going to stimulate the economy enough to grow. It will get much worse before it gets better. Say 10 yrs before this is full in the past, hope the economist with the rosy predictions is called out on his total miss on this when it doesn’t happen. Enjoy that university job we pay for, you get an F grade on this one.

shadow7071

August 26th, 2010
9:36 am

I agree with “The Economy” this report by Dhawan is a joke. First, he forecasts that unemployment will rise but then goes on to predict 143,600 new jobs over the next two plus years. My question is where will these 143,600 jobs come from? Is Lockheed-Martin planning to hire thousands of workers? No. Is Coca-Cola planning to expand their workforce by thousands of employees? No. Will there be a surge in new business start-ups that will need 143,600 workers? No. Read the news – typically when we see a new business relocate to Georgia the number of new jobs created is around 100-200. The last big employment creator was Kia and Kia type opportunities don’t come around often. This year I’ve assisted two manufacturers with relocation and start-up here in the U.S. They each will employ around 400-500 workers. From my work this is typical. So I ask, where will these 143,600 jobs come from?

Next he talks about personal income and the coupled yo-yo retail sales and industrial production and sums this up by commenting that inflation is overblown and not a concern. Dhawan, how about stagnation, is that a concern?

Then he comments that Georgia’s exports will pull Georgia’s economy along. The only thing that I know that we’re exporting is our money. Yes, thousands of containers arrive in Savannah packed with goods from China and elsewhere but they leave packed with American dollars. Sure, we export some things but the net balance of exports to imports is insulting.

Finally, he comments on housing. Let’s see, home sales are down 27%, a record since the 1960s but “the market is not as weak as it appears”. Obviously his model doesn’t reflect the opinions of seasoned real estate professionals, builders, sub-contractors, banks, mortgage lenders, foreclosure victims, bankruptcy courts, architects, real estate attorneys, landscape services etc.

winkasdad29

August 26th, 2010
9:42 am

Dude, everybody’s holding onto their money, which is driving down demand and increasing supply. Corporations won’t hire because they’re holding onto their cash – using credit is taboo right now. Companies will not use cash to fund new jobs.

Consumers are either trying to make ends meet every month, or hold on to the cash and other assets they have. Those who are in debt are trying to pay it off, so they have little disposable income.

Until people and corporations are willing to spend money to make money, this economic environment will not change. There’s not a whole lot government can do either.

I concur with the previous blogger – F is your grade.

Emory Texan class of '09

August 26th, 2010
11:18 am

The problem with economics is that is doesn’t tie in psychology nearly as much as it should. He hints at it with the housing prices, but he assumes people will go back to the free-wheeling days of the 90s. If you study the great depression, you realize that it forever altered their consumption rates. While this was not nearly as bad, it will still have a similar effect on increasing saving. November will do a lot to decide the direction of our nation and our state, so we really can’t predict anything until then. Political uncertainty now is wrecking our confidence to invest, and unless Republicans take over the house and hopefully Senate, businesses may remain spooked by the President that sees them as dollar signs only. Some of the greatest years in our nation were with a Democratic president and a Republican congress. Businesses are voting with their dollars for republicans so if they are successful, I can easily see Georgia growing in accordance to these predictions. I speak as a real estate analyst with an econ background.

The Economy

August 26th, 2010
3:05 pm

And this guy is a voice of reason????? and he isnt held accountable for his completely wrong prediction. Thats America, he’ll probably get a TV show.

A.S.Mathew

August 26th, 2010
6:04 pm

The “herd instinct” of a dark future is programmed in our brains, and people are too cautious to
make any instant decision in life. That short circulation of money, will create more unemployment.

In maths, 2+2 is 4, which is a universal answer. But, economics is not a precise science, and
the economists are making only hypothetical conclusions and predictions. For the last three years,
all of them have made wrong predictions. It does’t matter, whether they came from the London
School of Economics, Yale, Harward or any other place.

The hightest percentage of the people are being engated in blue collar jobs, and 90% of them have
gone to overseas for cheap labor. I do agree with you “The Economy”, because jobs are not
going to be created through any magic. As the unemployment rate is high, demands for housing
will be dim, and less demand create reduction in values.

Many economists predicted that the economy will get better by the middle of 2009, then by the
end of 2009, then by the middle of 2010, but all the predictions have gone wrong.

Until the U.S. employment gets better, oil price won’t go up, housing will be either stagnant or
deteriorate further, new car sales will be less, and a whole lot of things in the slow pace.

I bluntly question these great economists, why, none of them predicted this recession a few months
or years back? So, their future predictions have no validity. Some of the readers may not like
me putting God’s name, but may I reaffirm the fact that, only “God” knows the future.