February 28, 2014. Retrieved online March 3, 2014 from Alta LeCompte, Las Cruces Bulletin
NMSU hosts economic forum
[Excerpts below reprinted with permission: Read the complete Las Cruces Bulletin article]
An undecided Eugenio Alemán and a cautiously optimistic Jim Peach shared their 2014 forecasts at the third annual Economic Outlook Conference Thursday, Feb. 20, at the Las Cruces Convention Center.
The pair of economists spoke at the program sponsored by the New Mexico State University and Wells Fargo.
NMSU Regents Professor Peach predicted modest growth for the state economy, which has remained flat since the Great Recession. He stressed, however, that what happens in New Mexico depends to a great extent on what happens in the U.S. as a whole.
Alemán, senior economist for Wells Fargo, voiced some uncertainty for the national economy.
Slow growth likely
The duo addressed the outlook for economic output, jobs and individual and government income and spending. In addition, Peach touched on issues of special concerns to New Mexico – water, child poverty and education.
Alemán said the national economy grew at a rate of 1.97 percent in 2013.
Jobs a long-term concern
Alemán said boomers are retiring at the rate of 10,000 a day, while discouraged workers are exiting the job market.
“People get tired of looking for jobs and drop out of the job market. People are going back to college,” he said.
He said the average length a person is unemployed has declined from more than 40 weeks to 35.5 weeks, but long-term unemployment is becoming the biggest problem in the U.S. labor market.
New Mexico’s outlook for jobs
Peach predicted a 2 percent uptick in Las Cruces employment in 2014, and 1 to 2 percent for the state.
He said it will take until 2019 for the state to regain the jobs it lost during the Great Recession.
“In New Mexico, the largest sector is government, with over 20 percent of direct employment,” he said. “Like most of the nation, most of that is state and local.”
He added, however, the percentage of federal government jobs “understates the importance of those jobs in southern New Mexico.”
He called oil and gas a leading sector for New Mexico, forecast a lot of activity in the San Juan Basin in the next two years and stated: “We need more leading sectors.”
Local challenges unique
Peach said one issue of local concern “the worst multi-year drought since before Pat Garrett shot Billy the Kid,” which will have an impact on at least the agriculture sector.
Another concern is youth poverty, at more than 41 percent in Doña Ana County.
He did, however, cite reasons to be hopeful about the local economy, pointing to the possibility of manufacturing taking off in the Santa Teresa area, the proposed SunZia energy transmission line and Spaceport America.
National challenges misunderstood
Alemán said manufacturing is relatively strong nationally and is expanding, as is the service sector, which pays poorly.
“We have been going down in our savings rate in order to support consumption,” he said. “This is not sustainable. We need more income.”
Alemán said the federal government, too, needs more income.
“It’s not true that the federal government has been spending more every day,” Alemán said. “Actually, we have been lowering expenditures for the last five years.
“Federal spending as a percentage of the economy was at 24.5 percent before the recession. Today it is at 19.7 percent, which is the average for the past 50 years.
“We pay our politicians to decide who pays taxes, but they don’t even like to do that.”