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Economist: Recent uptick should be tempered by muted long term outlook

Economist Sean Snaith peppered his speech to bay area businesses with self-deprecating jokes and humorous photo-shopped slides.

But as Florida braces for its August unemployment report to be released Friday morning, the University of Central Florida researcher was frank about the grim challenges ahead.

Expect Florida's unemployment rate to continue ticking upward from 10.7 percent, reaching up to 11.3 percent by early next year, Snaith said. And though we may technically be out of the worst recession since the Great Depression and the Dow is once broke through 10,000, he anticipates growth will slow down at least until the spring.

"It's a false recovery. ... It's a relief rally," Snaith told attendees of a business roundtable Thursday sponsored by the Tampa Bay WorkForce Alliance. "Recovery will be lagging, muted and mild."

Economic output in the third quarter jumped in part due to the Cash for Clunkers program. But Snaith expects growth to fall for the next two quarters. He doesn't foresee a double-dip recession. But that's in part because economic numbers will be compared to a year ago when we were at the height of the financial crisis.

The culprits weighing down a comeback: high unemployment, continued tight credit and consumers either unable or unwilling to spend more freely.

Florida may not escape double-digit unemployment levels until 2012, Snaith said.

Yet, in one dose of optimism, he said the labor pool in the Tampa-Orlando region is best poised to ride an eventual recovery.

"The I-4 corridor will be the new breadbasket of Florida," Snaith said. "The problem is getting there from here."

Economist: Recent uptick should be tempered by muted long term outlook 10/15/09 [Last modified: Thursday, October 15, 2009 6:56pm]
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