WEST PALM BEACH, Fla.-Economists appeared to be squarely on the mark about 2009 as they saw negative growth extended through the first two quarters and a slow return to positive numbers in the second half of the year, but other predictions were not so accurate. Here's a look back at some predictions made at the start of 2009:
View on Unemployment
• Goldman Sachs Asset/Management VP John Olivio saw unemployment peaking in early 2010 at or around 10%. National unemployment has risen to as high as 10.2% and many economists now believe that those numbers will rise once again through the middle of the year even as jobs are created because more people will start to look for work. Olivio was on the money, however, when he said home values would fall to 25% to 28% from the peak, though they had already fallen 17% by the end of 2008.
On the Mark on Economy
• NAFCU economist Tun Wai was three months off when he predicted a return to trend growth, about 3%, would not happen until the fourth quarter; GDP rose by nearly that amount in Q3.
However, Wai and CUNA Mutual Senior Economist Dave Colby seem to be spot on that the economy was not "overcorrecting" when it collapsed last year.
"We're going to be bouncing along the bottom of the trough for quite awhile." Colby said late last December. "Our forecast model shows that mid-year we'll hit the trough but it gets real foggy as to when we'll get out of that. Consumer sentiment is not going to pick up significantly and consistently until people feel better about employment."
Study Examined Home Sales
• A study from SYNERGISTICS Research predicted that about 25% of consumers anticipated buying a home in the next two years and fully four in 10 renters were looking at a home purchase in that time frame.
"Even under the shadow of the mortgage market turmoil and an unstable economy, providers should not lose sight of the potential that still exists," said SYNERGISTICS CEO William McCracken. "There continues to be demand, and future expectations for home purchases are indicated by a notable number of consumers. The decline in housing values may actually be spurring some into the home purchasing market."
Risk Analysis Was Expected
• Harland Financial Solutions identified a number of operational trends for 2009 including green banking, mobile banking, branch optimization and a strict focus on risk management in the operational and risk segments. "There is a lot of anticipation that regulators are going to ask for more and more risk measurement. Regulators are going to want you to 'show your process' on the commercial side, just like on the retail side," said Sam Kilmer, VP-market development at Harland.
Readers: 'We Won't Be Hiring'
• An informal Credit Union Journal web poll found that 70% of CUs said they would not be adding staff in 2009 and experts agreed that cooperatives would be "extremely cautious" when thinking about bringing in new people.
"Hiring will be very slow to down," Carl Fredrickson, president of Carl Fredrickson & Associates predicted. "I think (CUs) will leave managerial positions unfilled rather than the lower levels, especially member contact positions. Credit unions can get by for a brief period without some kinds of mid-managerial talent. They may double-up duties and outsource."
