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Wachovia Economist Touts Evidence Against Recession

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By MICHAEL SASSO of The Tampa Tribune

Published: January 23, 2008

TAMPA - At least one prominent economist isn't predicting a recession for Florida or the nation this year.

Wachovia Corp. senior economist Mark Vitner told a crowd at the Palma Ceia Golf & Country Club in Tampa this morning that he expects economic growth to continue this year, although at a slow pace. He spoke at an annual economic forecast breakfast held by Wachovia.

A rising unemployment rate in Florida has led some people to fear recession, Vitner said, but unemployment rates alone aren't indicative. Vitner suggested that Florida is in a "growth recession" rather than an overall economic recession. A growth recession means that Florida's economic growth is not strong enough to keep unemployment from rising.

Several economic indicators point away from there being a current overall recession, he said.

People often refer to recessions as two consecutive quarters of decline in gross domestic product, the value of goods and services produced by a geographic area in a year. However, the National Bureau of Economic Research, which measures recessions, defines recessions more vaguely. Recessions are periods of time with general decline in economic activity, measured by factors including GDP, employment and industrial production.

Vitner said retail sales are down but manufacturing and wholesale sales are up. Also, though housing construction is way down, there has been a strong growth in commercial construction and exports, helping to prop up Florida's economy.

"We're not in a recession," Vitner said. "It's not a great economy, though. It's a tough economic environment."

That's not to say Florida and the United States will avoid recessions. Vitner is predicting that the country could fall into recession in 2010, partly because he expects a downturn in the world economy, particularly China, to drag down the United States.

Reporter Michael Sasso can be reached at (813) 259-7865 or msasso@tampatrib.com.

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