A. Lee Graham lgraham@bizpress.net
To hear a leading banking official tell it, the nation’s economic recovery reflects a mid-‘60s children’s book. “Things haven’t changed in 50 some-odd years as I look at the economic data,” said Thomas F. Siems, assistant vice president and a senior economist with the Federal Reserve Bank of Dallas.
Comparing the sputtering recovery with author Remy Charlip’s Fortunately, Siems painted the ongoing struggle as a mixed bag in which economic indicators put Texas ahead of the nation in terms of recovery. In Fortunately, a boy encounters fortune and misfortune in equal measure while struggling to get from New York to a birthday party in Florida, a one-step-forward, two-steps-back odyssey that Siems said mirrors the nation’s ongoing economic struggles. Sharing his insights at real estate group CREW Fort Worth’s March 5 luncheon, Siems compared the current national unemployment rate with those in recent history while examining other leading economic indicators that gauge the nation’s fiscal health.
“The good news is it’s coming down,” Siems said of the national unemployment rate. The economist puts little faith in the February unemployment report, which was expected to be released on March 7. “I like to count jobs,” Siems said. He also monitors the gross national product, or the value of goods the nation produces. Its average annual growth rate has slowed with each successive recession in the past several decades, from slightly higher than 4 percent to 3.2 percent and to 1.9 percent, the rate since 2000. “This is a big concern to me because we’ve been able to grow our way out of certain problems in the past. But we need to address those problems now.” Compared with the last few recessions, the recovery following the 2008 downturn has been “real weak,” Siems said. Still, he championed Texas for recovering quicker than most of the nation and enjoying the status as its top exporting state. “We’re almost a full percentage [point] higher in terms of job growth in Texas” than the national rate, said Siems. He cited 2008 in particular. “We were the only state in the nation that didn’t lose jobs that year. We were the last to go into the recession, and we were one of the first to come out,” Siems said.
On a national level, Siems painted a more worrisome picture in which a rising national debt could yield dire consequences. “At [a certain percentage], your economy permanently slows down. I’m concerned because I think our economy is already permanently in a slower growth mode.” Rising debt could make the world wonder whether the United States can pay off its debt. And if ratings on debt securities are downgraded, that can boost interest rates.
“Then it’s harder to pay because your interest payments on debts are even higher. To me, this is the issue of our time,” Siems said. Asking whether confidence drives jobs or jobs drive confidence, Siems again beat the drum for Texas. Oklahoma, Arkansas, Louisiana and Texas make up the west south-central region, according to The Conference Board’s Consumer Confidence Index. “This is primarily a Texas story,” said Siems, noting that about 80 percent of the four-state population lives in Texas. “We’re almost always the most optimistic region.” So despite its challenges, Texas is among the more economically desirable states to be in, Siems said. “We still have a lot of problems, but we have time to address those. We’re still the land of opportunity … Texas is the place to be.”