February 21, 2014, by College of Business Staff
Permission to reprint these presentations has been granted by each presenter.
- NMSU: Dr. Jim Peach. Economic Outlook Conference: Feb. 20, 2014
- Wells Fargo: Eugenio Aleman. Economic Outlook Conference: Feb. 20, 2014
The 2014 Economic Outlook Conference, co-sponsored by Wells Fargo Bank and the College of Business at New Mexico State University (NMSU), featured Eugenio Alemán, senior economist and director at Wells Fargo, and Jim Peach, NMSU regents professor of economics and international business.
The two provided national and state economic forecasts for the year ahead.
The free conference took place on February 20, 2014, at the Las Cruces Convention Center.
NMSU And Wells Fargo Offer Economic Outlook For 2014
Published on Feb 24, 2014
Recovery from recession is moving at different speeds across the country. Many are curious to what this year will bring for the national and local economy.
New Mexico State University recently partnered with Wells Fargo to give a national and regional economic outlook and analysis for 2014.
Dr. Eugenio Alemán, Director and Senior Economist for Wells Fargo gave a national forecast for this year. He says that the first quarter of the year got off to a tough start, because of the rough winter that much of the country has faced.
Alemán says that the rest of the year looks to show some promise, one reason is the fiscal agreements that Congress reached, and the Federal Reserve beginning to ease its intervention into the economy.
The labor market was addressed also. Alemán says that the unemployment rate is going in the right direction, but for the wrong reasons.
“Basically what is happening is that the labor force participation rate has been declining from 67 to 63 percent, which pushes unemployment down. Not because we are growing jobs, but because people are just dropping out,” says Alemán.
According to Alemán, a big reason for that drop is that Baby Boomers are retiring in large numbers with estimates around 10,000 per business day. That is a lot of experience leaving the workforce.
“Those that are retiring have 30 to 40 years experience and some of them have college degrees, and whoever is coming into the workforce has no experience, and many of them have no college degrees,” says Alemán.
Alemán says that it’s not so much a generational issue with the unemployment rate. It is all about what people can offer employers, and having a college degree can make a difference.
“If you look at the unemployment rate for college graduates it’s at 3.4 percent. That is what we call full employment rate. So everybody that has a degree has a job. Of course, you may have to move to North Dakota, but if you have a college degree you are almost guaranteed a job,” says Alemán.
Overall, the country is recovering from The Great Recession with states moving at different paces. States that have a bulk of jobs in technology and energy are making the quickest recovery.
“North Dakota, Texas, even California are making a recovery,” says Alemán.
States that are relying on the federal government expenditures for employment are seeing the slowest pace of recovery. New Mexico is one of the states experiencing slow recovery, with a bulk of its employment relying on federal, state, and local government.
Dr. Jim Peach, Regent Professor in Economics and International Business at New Mexico State University gave an update and analysis of the economic climate for the state.
“We’ve had nearly no increase in employment since the recession was declared to be over in June 2009,” says Peach.
Peach mentioned that the oil and gas industries have helped some in the eastern part of the state, but not enough to draw large employment gains.
Doña Ana County has some bright news and it is around the Santa Teresa Industrial Park. Many are talking about the over $400 million that Union Pacific has invested in a new intermodal station that is set to open this year.
However, there are still challenges in finding a skilled and educated workforce to fill some of the jobs that are available.
“I’ve argued for a long time that New Mexico has to have superior educational workforce training to our surrounding states,” says Peach.
Peach says that large private sector companies look for a skilled and educated workforce already in place before they make a move. With a large high school drop-out rate in Southern New Mexico, competition for attracting large employers is tough.
“We have essentially twenty-five percent of the population excluded from the economy,” says Peach.
Peach also mentioned that education is not the only fix. The state needs to invest in infrastructure, with very good transportation systems and invest heavily in broadband access. He says the state is not investing what it should be in these areas.