See photo gallery at the end of this article
Published on Feb 19, 2016
An economic forecast for New Mexico, and the rest of the country took place on Thursday, February 18, 2016, at the Las Cruces Convention Center. New Mexico State University and Wells Fargo hosted the economic outlook conference.
Dr. Eugenio Alemán, a senior economist with Wells Fargo says that with the manufacturing sector and low petroleum prices, the economy is going to continue to stagger some.
“The manufacturing sector is about 12 percent of the U.S. economy so its not a big chunk of the economy, the problem is that it was one of the sectors that was growing very fast, especially after the great recession, and one of the sectors within the manufacturing sector that was growing very fast was the energy sector,” says Alemán.
In December, The Federal Reserve announced it was increasing interest rates for the first time in almost a decade, but Alemán says that with the economy still dragging, future increases could be stalled.
“We still have three more increases of interest rates this year (officially), but if conditions continue to remain as they are today, it is going to be very difficult for them to increase interest rates,” says Alemán.
According to the U.S. Department of Labor, the national unemployment rate is at 4.9 percent. New Mexico has the highest unemployment rate in the country at 6.7 percent, according to Department of Labor data from December 2015. Just one year earlier in 2014, the unemployment rate in the state was at 6 percent.
Dr. Jim Peach, NMSU Regents professor in economics discussed the forecast for New Mexico at the conference Thursday. Although Peach says he’s an optimist, he says the state still has some hard times ahead.
“2015 was a rough year, and there is nothing in the data that suggests 2016 will also be a rough year for the New Mexico economy. New Mexico tends to do very well when the nation does well, and there are a lot of signs that the national economy is slowing down,” says Peach.
Job growth in the state hasn’t been great. According to February’s Labor Market Review from the New Mexico Department of Workforce Solution’s the state only added 2,600 jobs from December 2014 to December 2015. Albuquerque’s job growth during that time was at 1.3 percent while job growth in Las Cruces declined 1.5 percent.
Peach says slow employment and income growth is affecting every aspect of New Mexico’s revenue situation. He says New Mexico is still trying to get jobs back that were lost during the Great Recession.
“As a longer term, we’re still down about 19,000 jobs from where we were in December (2007), when the recession started. We’re not doing well,” says Peach.
Peach says that there is one thing that could help New Mexico, and that is higher oil prices. However, he says there is not much suggesting that will happen in the near future.