Business

Present economic outlook 'dismal'

TURLOCK — Anyone who expected a gloomy status report from economics Professor Kelvin Jasek-Rysdahl at Wednesday's Economic Trends Luncheon wasn't disappointed.

Jasek-Rysdahl, a keynote speaker at the Turlock Chamber of Commerce's 23rd annual luncheon, noted that national forecasts on unemployment, gross domestic product growth and consumer spending aren't rosy.

"As I was putting this together, I was thinking, 'Boy, this is dismal stuff,' " said Jasek-Rysdahl, who teaches at California State University, Stanislaus.

But Jasek-Rysdahl also pointed out there was an evolution in Stanislaus County's economy between 2006 and 1996, when he joined the university.

Food processing and manufacturing jobs declined in the county during that decade, he said, but service and construction jobs rose. As a result, he said, unemployment rates became more stable and lower, because the county sees less impact from seasonal job swings related to agriculture and food processing.

"We're maybe getting a little closer to resembling the state," Jasek-Rysdahl said, noting that Stanislaus' unemployment rate was much closer to the state's rate in 2006 than it was in 1996.

However, that comes with the caveat that manufacturing jobs do more to create other jobs than construction or service jobs do, Jasek-Rysdahl said.

The professor's trend comparison did not take into account the economic downturn of the last year, particularly the decline in the number of construction, real estate and finance jobs.

Nationally, Jasek-Rysdahl said, consumer spending and debt, labor markets, food and energy prices, monetary and fiscal policy and the international economy are potential concerns in how the economy will develop.

A $150 billion economic stimulus plan approved in Washington, D.C., could help the economy, but it depends on how consumers spend the taxpayer checks they'll receive this year as part of the plan, he said.

"Are they going to spend it on foreign goods? Are they going to use it to reduce debt?" he said. "What they do with that money has a big impact on how $150 billion goes through the economy."

By most estimates, Jasek-Rysdahl said, the plan's maximum impact would be a growth in gross domestic product of three-tenths of 1 percent.

On the positive side, he noted, Stanislaus County benefits from a weak dollar internationally with agricultural products being sent around the world.

In comments after his presentation, Jasek-Rysdahl said some of Stanislaus County's growth in service and construction jobs is explained by policies — in the county and statewide — that emphasized home building and retail development.

But locally, he said, population growth in the last decade also spurred the development of more houses and retail sales.

"I think it's more a question of how policy-makers deal with that," Jasek-Rysdahl said. "Is unlimited growth what you want?"

Bee staff writer Ben van der Meer can be reached at bvandermeer@modbee.com or 578-2331.

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