Advertise Here

Office Hours

Economists forecast more of same for 2011

The economic recovery will grind slowly forward next year, extending this year’s modest improvements but not breaking out strongly enough to significantly affect unemployment and household income, economists John Mitchell and Grant Forsyth said today.

Speaking at a Greater Spokane Incorporated forecast breakfast, Mitchell said businesses are delaying investment decisions because of uncertainty regarding future tax policy, health care reform and environmental regulation.

Paralysis on Capitol Hill has put the levers of economic stimulus in the hands of the Federal Reserve, which is keeping interest rates low and expanding the money supply in an effort to fuel more investment and consumer demand, he said.

Meanwhile, Mitchell said, consumers are repairing personal balance sheets by backing off on the use of credit.

Household wealth has plunged by $11 trillion since peaking in 2007 and housing prices, the foundation for much of that wealth, will continue to lose value in 2011, he predicted.

“This isn’t over,” said Mitchell, an independent consultant and former chief economist for US Bank.

Eastern Washington University Professor Grant Forsyth said he expects some job growth in Spokane and Kootenai counties, but unemployment will remain above eight percent.

Rates in neighboring counties will be higher, he said.

Forsyth said per capita income may increase slightly, but home prices will continue to fall by around four percent. Public projects are propping up commercial construction activity, he said, warning that sector is headed for a fall without more private-sector building.

Forsyth said rural counties are much more dependent on government jobs and transfer payments like Social Security and Medicare. If government austerity measures cut those benefits, the economies in outlying areas will be disproportionately affected, he said.



Please keep it civil. Don't post comments that are obscene, defamatory, threatening, off-topic, an infringement of copyright or an invasion of privacy. Read our forum standards and community guidelines.

You must be logged in to post comments. Please log in here or click the comment box below for options.

comments powered by Disqus
« Back to Office Hours

Get blog updates by email

About this blog

The Spokesman-Review business team follows economic development in Spokane and the Inland Northwest.

Sign up for our business email newsletter
Latest comments »

Read all the posts from recent conversations on Office Hours.


Alison Boggs (@alisonboggs) Online Producer Alison Boggs posts and manages content on and its social networking accounts.

Recent work by Alison

Scott Maben Scott Maben is a Deputy City Editor who covers North Idaho news and higher education.

Addy Hatch is the city editor, and formerly was business editor.

Search this blog
Subscribe to this blog
Advertise Here