Future of Economy according to Fed

This is good news and bad news for Coral Gables.  The housing recession will continue unabated so property values are not going anywhere.  The city will be under pressure to increase taxes, no doubt.  Growth may increase the income and assets of the wealthy, and that will help the to 15 percent of so of our residents.  The retail district may see a slow increase in sales. All in all, the outlook for several years is not bright.   Any attempt to reduce federal spending will have a bad impact on the economy–stimulus is still needed.

The U.S. economy will expand at a 3.5 percent to 4 percent rate during 2011, as it is “increasingly supported by private spending,” Rosengren said in his prepared comments. Growth won’t top 4 percent because the housing market’s recovery is likely to be weaker than usual, given the tightening of lending standards and high vacancy rates, according to Rosengren.

“If housing-related growth is not going to boost the recovery this time around, we may need policy — particularly monetary policy — to continue playing a stimulative role,” said Rosengren, who doesn’t vote on monetary policy this year.

Growth of 4 percent would still leave the unemployment rate close to 9 percent at the end of 2011, a level that’s “far above anyone’s estimate of full employment,” Rosengren said.

via Rosengren Says Stimulus Needed to Lower Jobless Rate (Update1) – Bloomberg.com.

A Touch of Economic Realism for Coral Gables Candidates

The economy of  South Florida, Miami-Dade County and including Coral Gables are not doing well.  Our city may do a little better because of its perverse income distribution (more wealthy who are doing better than others because of a rising stock market), but construction, construction employments, retirement incomes, family consumption should remain daunting for years to come.

It would appear that the city commission and city manager are living in a different world, raising taxes year after year, favoring intransigent labor unions and continuing to spend on superfluous activities.

…what we’re looking at over the next few years, even with pretty good growth, are unemployment rates that not long ago would have been considered catastrophic — because they are. Behind those dry statistics lies a vast landscape of suffering and broken dreams. And the arithmetic says that the suffering will continue as far as the eye can see.

via Deep Hole Economics – NYTimes.com.