In a speech filled with economic data, psychological observations and skepticism, economist Bill Conerly told an audience in Vancouver on Thursday that Clark County’s unemployment rate may actually be lower than reported.
“We’re past the bottom,” Conerly said in summing up his remarks on the economy, but “it’s not going to look really,
really happy for quite some time.”
Connerly, who holds a doctorate in economics from Duke University and is principal of Lake Oswego, Ore.-based Conerly Consulting LLC, spoke to a group of more than 100 attendees of an event presented by Riverview Asset Management Corp. and Riverview Community Bank at the Heathman Lodge.
He said that Clark County’s unemployment rate, which stands at 13 percent as of May, is suspect to him because it is based on a sample of a small group of people.
“The good news is that it’s possible the data are just wrong,” he said. “You have a problem,” he said, but it’s a matter of how big that problem is.
Conerly said the county’s high unemployment rate is based on “low-fidelity data” and reflects the great number of people who have moved to the area. “A lot of people come without jobs,” he said, including married couples in which only one spouse is employed.
Conerly said Clark County’s economy fell harder than others partly because, like other “fringe” metro areas, it had grown faster by attracting people looking for affordable homes. While older metro areas didn’t see as big a drop in home prices when the economy spiraled, faster-growing fringe areas such as Clark County did, Conerly said.
When times were good, Conerly said, people were moving to Oregon and Washington, including Clark County. “In a recession, people don’t move as much,” and companies account for this in their business and hiring plans because the number of customers available to them tracks the rate of population growth in a given metro area. “That (population) growth,” Conerly said, “is going to bounce back after the recession.”
Conerly said the Pacific Northwest should fare well against any ripple effect from the European debt crisis because the region’s top trading partners are Canada, China and Japan. “Europe isn’t as big a factor on our economy,” he said. “I don’t think it’s going to pull us down.”
There should be “no inflationary problems” this year or in 2011, but Conerly cautioned that as the economy recovers — and inflationary pressures increase — “we’ll have problems if the (zero interest rate) policy doesn’t change. The Federal Reserve has to start snugging up rates later this year.”
While he isn’t ignoring the federal deficit, Conerly said he thinks concerns that U.S. deficit spending, including on economic stimulus programs, will soon leave the country broke are wrong, partly because there is more time than people think to deal with the country’s fiscal issues. “I don’t see a sudden calamity,” he said. “I see higher taxes coming.”
Looking forward, Conerly said businesses should consider how employees who survived the recession will relate to new hires once business picks up. The veterans will grouse about how they’ve had it tougher than the new hires, while the new hires will complain about the veterans’ griping. It’s the kind of friction that employers will have to deal with, Conerly said, and that human resources experts — the “touchy-feely people that I normally laugh at” — can help them with. “You should talk to them,” Conerly said.
