Economy will continue to grow, though not significantly, expert says
Economist William Strauss' big picture forecast hasn't been too rosy in years past, but he had better news Friday for Lake County business and community leaders.
While it won't be significant, economic and job growth — particularly in manufacturing — is expected to be solid the next two years, according to Strauss, a senior economist and economic adviser with the Federal Reserve Bank of Chicago.
"The outlook is for improvement, not trend but above trend performance both this year and next year," he reported to a crowd of about 80 who attended the 7th annual Economic Forecast Lake County, hosted by the Lake County Chamber of Commerce.
He was on the mark a year ago when he suggested unemployment would edge lower and the U.S. economy would increase modestly as expected, and delivered a brighter message this time.
After stagnating the first half of 2013, the gross domestic product showed a "pattern of acceleration," he said. Growth is projected at 3 percent for 2014, compared to the expected 2.25-percent final figure for 2013, a decent though not substantial increase, he added.
A "nice improvement" in housing starts is expected in each of the next two years, according to Strauss. But there still are "too many homes out there relative to demand," he added.
And home prices, which fell 40 percent, have begun to rise.
"They're feeling not as distressed," he said of homeowners. "There is some healing effect that's happening as these prices move higher."
Employment also is expected to improve. Strauss said about 2.2 million jobs were created in 2013 and he expects close to 3 million to be added this year. However, 8.7 million jobs were lost during the economic downturn, which ended in June 2009, he noted.
While those who stopped looking for work affect the unemployment rate, one sign the labor market is beginning to improve is the "quit rate" is up, meaning people are finding other opportunities, according to Strauss.
"We're having to find a lot more people and sometimes it's difficult to find people with the skills being requested," Laura Leal, staffing consultant with Express Employment Professionals in Waukegan, said after the session.
"We had our best quarter the last quarter of this past year," added Lucy Torres, who owns the agency.
The bright spot has been manufacturing, which lost 2 million workers during the Great Recession.
"Manufacturing, like the economy, will show above trend performance," Strauss said.
That has become a benefit and a challenge in Lake County.
U.S. Rep. Brad Schneider, a former business and management consultant, who took office a year ago told the audience the 10th Congressional District has the third highest concentration of manufacturing in the U.S.
"Anything we can do to get people the skills they need to grow and develop ... that's going to make a difference," he said.
Lake County Board Chairman Aaron Lawlor said there have been economic successes and challenges.
"My concern is how can we grow the next generation of workers in Lake County," he said.
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