Prescott economy on slow road to recovery
Dovey Talbot has career aspirations.
Talbot sat on a bench at the Prescott Gateway Mall Thursday afternoon talking about her dream of becoming a nurse after putting out her Pall Mall cigarette.
"I really want to do something I have more passion for," she said.
Just a few feet from the café job she was taking a break from, Talbot appreciates now more than ever the fact that she is able to pursue the career and has a paycheck.
"If I didn't have a job, I wouldn't be able to pay my bills or go out with my friends," she said.
Talbot is one of the fortunate ones according to Lee McPheters.
A small group of around 65 people gave up their Tuesday night to listen to McPheters talk about the state and local economies at the adult center in Prescott.
The Prescott Area Commercial Group and the Arizona State University Foundation sponsored the chat with McPheters, who spends his days as a professor of economics at the school. In a nutshell, McPheters said the state's economy is basically at ground zero and a recovery will follow only on the heels of a revival of the federal and state economies.
"We're still in very, very weak economic conditions," he said.
His roughly 60-slide presentation touched on everything from job losses to the Gross Domestic Product and most everything in between.
"We're at the bottom of the worst business cycle since the Great Depression," he said.
Based on economic trends he examines, McPheters said the Prescott area typically rebounds more strongly than the state does in prior recessions. That said, McPheters believes it will take three or four years for the economy to get back to where it was at its peak in 2007.
And that means another year of job losses in 2010.
The Arizona Department of Commerce reported that the Prescott area unemployment rate fell from 9.5 percent in July to 9.2 percent in August.
McPheters believes the area's rate will hit 10 percent in 2010.
The good news is that the losses will either be smaller than they were in the past couple of years and some categories, like single-family home permits, will improve.
McPheters is predicting the nation's Gross Domestic Product will grow about 5 percent total in the third and fourth quarters of this year.
While most leading economists agree that the recession is over, McPheters said 87 percent of consumers disagree with that. That perception is key because McPheters said consumers are 70 percent of the economy.
While people are saving money at a growing rate, that drop in consumer spending could become a problem, according to McPheters.
And McPheters said Arizona ranks dead last in the rate of job creation in the nation. He said the free fall in home building permits hit the bottom this year and he is forecasting gradual improvement over the next three years.
Breaking it out, McPheters foresees more job losses next year, home prices stabilizing in 2011, 50,000 single-family permits in 2012, jobs returning to 2007 peak in 2013 and an unemployment rate below 6 percent in 2014.