Newspaper article The Florida Times Union

Economic Predictions Hard to Pin

Newspaper article The Florida Times Union

Economic Predictions Hard to Pin

Article excerpt

Byline: Karen Brune Mathis, Times-Union senior business writer

A Federal Reserve Bank of Atlanta vice president told a Jacksonville economics group yesterday that the country and the Southeast are "in relatively healthy economic shape."

Thomas Cunningham said he expected to see economic growth of 3 percent to 3.5 percent for the next two years and an overall "bottom line forecast" that "isn't too bad."

He then summed up his outlook and his reasons for it with the cautionary note: "I guarantee that what I just told you is wrong."

Cunningham emphasized to the Economic Roundtable of Jacksonville that it's risky to predict what the economy will do because of unknown factors. To that end, he cited three problems that could affect the economy:

-- War in Iraq. "You just don't know how wars are going to go," Cunningham said.

-- Another terrorist attack.

-- Venezuela. The country exports oil to the United States, and "things are shaky there." That could produce a "mini" oil shock.

Without knowing how those three issues could play out, Cunningham said it was tricky to make any economic predictions about another recession.

In fact, the latest recession officially began in March 2001, but the National Bureau of Economic Research has not announced when the recession might have ended.

Cunningham also said that the probability of a so-called double-dip recession "is real close to zero." That's because economies don't take a dip without reason, he said.

Instead, events like war and oil shocks can lead to recession, which means that "you can get recessions that stack up."

Does he see that happening? "There are any number of bad things that can happen," he said, but without knowing exactly what could take place, he can't predict how the economy would react.

Still, Cunningham stressed that "economic expansion is the order of life. …

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