Financial trio: Economy might see painful second quarter
Date posted: May 1, 2013
SHERIDAN — A trio of economic forecasters told members of the Sheridan business community Tuesday that while the national economy looks to be solidly on the rebound from the recession of 2008, federal spending cuts and economic losses abroad could make for a painful second quarter of 2013.
“This is the reality we’re in,” said Scott Anderson, chief economist at the California-based Bank of the West.
The morning’s events were part of an economic outlook tour hosted by the Wyoming Business Alliance and sponsored by Bank of the West.
In addition to Anderson, presenters included Anne Alexander, director of the Department of Economics and Finance at the University of Wyoming, and Bill Schilling, president of the Wyoming Business Alliance.
Anderson said that as the result of sequester cuts and struggling European markets, short-term growth in the U.S. economy will depend largely on the ability of other sectors to pick up the slack.
“The real question is whether the consumer is able to drive the economy moving forward,” he said.
Both locally and nationally, Anderson said there’s reason to believe the struggles of international markets will affect domestic manufacturing and, in turn, slow consumer spending.
“There (are) a lot of headwinds coming from abroad that are affecting our manufacturing,” he said. “That’s sometimes a leading indicator of where our service industry is heading.”
While the stock market has regained wealth lost during the recession, other sectors of the economy have not been so lucky, as evidenced by sluggish unemployment rates and a gross domestic product that has failed to fully rebound.
“The problem is the wealth created (in the stock market) isn’t being distributed evenly all throughout the country,” Anderson said.
Still, he noted that other factors such as a steadily improving housing market provide reason to be optimistic.
Until international markets improve, sluggish but steady domestic growth will likely prevent the United States from sinking bank into full-blown recession mode.
“I think we’ve got a sustainable path in the meantime,” Anderson said.
As for federal fiscal contractions, Anderson said Americans are likely to feel the full brunt of the cuts during the second quarter of this year.
“I just don’t think we’ve seen it showing up yet, but it is going to happen,” he said.
He added, however, that he is hopeful the situation will improve during the second half of the year.
Locally, Alexander said she predicts a mostly stable Wyoming economy relative to other U.S. states in the months to come.
With one of the lowest and most unchanging unemployment rates in the nation, Alexander said the steadfast nature of the state’s economy will likely offset other factors such as slow growth in the energy sector and a stagnant labor pool.
“We have both headwinds and tailwinds,” she said.
In Sheridan County specifically, Bill Schilling said the local community has positioned itself to weather economic storms with organizations such as the Downtown Sheridan Association and Forward Sheridan in addition to continued investments in educational resources such as Sheridan College.
“This county, I think, is poised to continue to grow and grow better than it has in the past five years or so,” he said.
Tuesday’s talk at the Holiday Inn was one of 12 stops of the Wyoming Business Alliance’s 2013 economic outlook tour.