Don’t hold your breath if you’re expecting the economy to rebound anytime soon. At least that’s what one local economic forecaster is saying.
According to Barton Smith, head of the University of Houston Institute for Regional Forecasting, all signs right now suggest that the sluggish economy will get even worse this coming fall.
Smith says that while all eyes are on the housing market these days as a predictor, he believes labor stats tell an equally important story. First-time claims for state unemployment benefits across the country have risen to over 450,000 during August, the highest rate Smith says he’s seen in a long time.
“When we start seeing 350,000,” he says, “it means we’re seeing some slowdown. At over 375,000, we’ve always said this is a warning sign. When you get over 400,000 … we’re in trouble.”
By comparison, says Smith, during the so-called recession of 2002, the number hovered around 400,000. During economic boom times in 2006, the number of first-time claims for unemployment benefits was around 275,000.
Smith says that the fact many jobs filled by college students during the summer open up in the fall does not impact the statistics.
From January through August, says Smith, the United States has lost about 500,000 jobs. “We may double that just within the fall,” Smith says.
Smith’s prediction: Keep your eyes on those labor stats, for unless the number of first-time claims dip back below 400,000, “we’re going to experience a much rougher fall than most people think.”
-- Chris Vogel