Tags: Naroff: Sluggish Recovery Has Begun

Naroff: Sluggish Recovery Has Begun

By    |   Wednesday, 16 Dec 2009 04:03 PM

The economy has begun to emerge from recession but the rebound will be weak, says Joel Naroff, president of Naroff Economic Advisors.

“I think the recovery is under way,” he said in an interview with Newsmax.TV.

While job losses are just about over, the labor market remains an area of concern, Naroff says.

“There’s a lot of damage that was done during this recession,” he points out.

Click to see the interview now on Newsmax.TV

“The financial market collapse really hurt a lot of firms. And we’re likely to see a recovery that’s slow in terms of economic growth, and of even more concern is that job gains may be very weak at least through most of 2010.”

Naroff sees little risk of a double-dip recession. Even people who have kept their jobs have reduced their spending out of fear they will lose them, he says.

“As long as the job market firms, and the numbers that we’re getting are telling me it is beginning to firm, I suspect that they’ll start spending,” Naroff explains.

“It’s the consumer that will lead us forward, and I think that will really become more clear as we move through the first half of next year.”

Plenty of problems still exist, such as the stagnant real estate market, Naroff says.

“If we do have the weak job growth that I expect, then this slowly rising tide is not going to lift all boats, and a lot of smaller to mid-size businesses are going to have some problems.”

Naroff expects inflation to increase, but not to a worrisome level. “There is going to be some additional pressures on prices,” he says. “We’re looking at that already.”

Commodity prices are rising, particularly oil, he notes.

Oil prices are at levels — about $70 a barrel — that would generally be associated with a booming economy, Naroff says. He sees a good chance that oil will break $100 again next year.

A recovery in consumer demand and business investment could cause some inflation as well, Naroff says.

“Businesses might try and raise prices to get those earnings back up,” he notes.

“But this isn’t going to be the 1970s. High inflation could be 3 to 3.5 percent, nothing close to double digits.” Future commodity price gains will be limited, Naroff predicts.

As for the dollar, he expects it to slide further, but isn’t too worried about it.

“I see the dollar continuing to slowly but steadily fall, and I don’t think that’s necessarily bad,” Naroff says.

“U.S. producers are becoming more competitive around the world as a result of that, and we’re not getting an awful lot of price inflation from imports, despite the decline in the dollar” since the U.S. is the key market for foreign producers.

Click to see the interview now on Newsmax.TV

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The economy has begun to emerge from recession but the rebound will be weak, says Joel Naroff, president of Naroff Economic Advisors. I think the recovery is under way, he said in an interview with Newsmax.TV. While job losses are just about over, the labor market...
Naroff: Sluggish Recovery Has Begun
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2009-03-16
Wednesday, 16 Dec 2009 04:03 PM
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