LAS CRUCES — The economy may not be all peaches and cream, but it has moved beyond the bread-and-water rations the nation experienced during the recession, according to three New Mexico State University economics professors.
“We’ve made a lot of progress but we have a long way to go,” said Jim Peach, Ph.D.
Peach, who joined Chris Erickson, Ph.D, and Ken Martin, Ph.D., in the quarterly Greater Las Cruces Chamber of Commerce economic forum Thursday at KRWG-TV on the NMSU campus, addressed the national and local economies, as well as the financial markets.
Peach, discussing changes in the national economy, pointed to an increase in the gross domestic product levels as a sign that we are in the fifth year of recovery following the recession that struck in 2007-2008. Eighteen of the past 20 quarters showed positive growth he said. The current year is on track for 2 percent growth.
However, employment remains “relatively weak,” he said.
“We lost 8 million jobs in the recession but have gained them back by May 2014,” he said. That is barely a return to normal and reflects no net growth. Of those jobs, the economy has dropped 1.6 million in manufacturing and 1.5 million in construction. Auto sales are rebounding but the housing industry has not yet recovered, Peach said.
The federal sequestration placed a drag on the economy and that was felt especially in New Mexico, according to Erickson.
Last year, Erickson predicted sequestration would trim 1 percent to 2 percent off the economy, numbers that held true in the state. Now, the statewide economy is growing by roughly 0.5 percent, he said. For the month of July, the last for which statistics are available, manufacturing, construction and other services were down statewide. But New Mexico’s booming energy production has helped bolster those losses.
“Natural resources, oil and gas, is doing well,” Erickson said. “That’s reflected in the state budget. We’re seeing a recovery there.”
The state is now ranked 31st in GDP growth, 43rd in construction growth and Las Cruces has outpaced Albuquerque in overall economic rebound, he said.
“We’re doing better, but there is a long, long way to go,” he said.
Addressing the state of financial markets, Martin pointed out, “The bull market goes on.” While market shares have dropped sharply in the past few days, the long-term trend remains positive. Overall, the market is up 6 percent over the beginning of summer and hit all-time record highs 24 days during the summer.
Some concerns spooking investors include international tensions, including conflicts in the Mideast and tensions in eastern Europe.
“Russia is flexing its muscles,” Martin said. “These things erode confidence.”
Adding to the uncertainty is the slowing European economy and the resulting drag on international markets.
The good news, Martin said, is that the U.S. markets are not in a fragile state similar to the housing “bubble” of the last decade.
As to investments, the tried-and-true approach of diverse investments remains sound. He predicts the markets will continue a slow rise.