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Jan 13, 2009 5:18 pm US/Eastern
Economists Make Predictions For 2009
PITTSBURGH (KDKA) ―
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Both Hoey and PNC's chief economist Stuart Hoffman told a couple hundred business leaders that the worst was yet to come in the first half of 2009 -- particularly in unemployment now at 7.2 percent.
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"We're facing a serious recession. This is likely to be in the U.S. the longest recession of the post-war period."
That's the bad news that Bank of New York Mellon's Chief Economist Dick Hoey delivered to the Economic Club of Pittsburgh at a luncheon meeting today.
And here was his good news.
"We're not going to have a depression. There ain't gonna be no depression," he said.
Both Hoey and PNC's chief economist Stuart Hoffman told a couple hundred business leaders that the worst was yet to come in the first half of 2009 -- particularly in unemployment now at 7.2 percent.
"It's already up from 4.5 percent to 7.2. In our view, it will probably get to at least 8.5 percent or thereabouts before it levels off," said Hoffman.
That translates into another two million more Americans out-of-work in the first half of 2009.
But Pittsburgh -- which did not suffer as much in '08 -- may maintain its edge with Hoffman predicting that local unemployment "will probably get up to about 7.5 percent, not as high as the 8.5 for the U.S., but still somewhat higher."
And while Pittsburgh housing prices did not crash last year, this year will be different, if not as bad as elsewhere.
"House prices in Pittsburgh will be down this year maybe two or three or four percent, but less than the national trend which we think will be 6.5 percent, on top of an even bigger drop in 2008," noted Hoffman.
But both economists think the second half of the year could be better.
"You will all feel much much better by the end of 2009," Hoey told the crowd, "but you're going to be scared out of your wits in the meantime."
Now both economists said they didn't exactly get it right at the beginning of 2008 -- so take these predictions with the understanding that economics really is an inexact science.
A lot this year will depend on the stimulus package, the Federal Reserve's interest rates, banks freeing up credit, employers maintaining employment and all sorts of international events that affect energy pricing.
No wonder predictions are so hard to make.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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