Speaking at his annual "State of the Economy" assessment at Santa Clara University this morning, Belotti painted an optimistic economic picture for the upcoming year.
"Despite what you've read in The New York Times, things are much better," Belotti said, citing improvements in the index of leading economic indicators over the last nine months.
Belotti said the numbers in the industrial and manufacturing sectors are especially encouraging, because they have risen in the last six months across much of the industrialized world. The economic stimulus package passed last year will make a greater impact this year with increased expenditures on projects, Belotti said.
Belotti said a combination of government and business spending, a change in the foreign sector and increases in inventories will boost the economy by 3.5 to 4 percent this year.
Contrary to what some may believe, Belotti said one of the leading causes of the recession was a decrease in business spending rather than consumer spending. In 2009, business spending, which includes spending on residential and non-residential construction, machinery, software and inventory, was down by 12.5 percent.
"The decline is over. This year, I expect business spending to turn around," Belotti said, adding that businesses are preparing for a six-month cycle of growth and innovation.
Belotti predicted that government spending on goods and services will also contribute to the gross domestic product by 0.8 percent.
Another indicator of economic growth is the rate of U.S. export, which at 18 percent is increasing at a faster rate than the 12 percent rate of imports, leading to an increase in the GDP.
Belotti's outlook on unemployment, currently at 10 percent, wasn't as optimistic, at least in the first half of the year. He said the rate of unemployment might even increase to 10.2 percent before declining again by the end of the year.
Belotti said the Silicon Valley economy correlates with the U.S. economy insofar "as the U.S. economy grows, we grow faster. When things go down, we go down, too."
At a U.S. Department of Labor briefing this morning, Amar Mann, a regional economist for the U.S. Bureau of Labor Statistics, announced that the Silicon Valley has done well relative to rest of the country.
Mann and a fellow economist, Tian Luo, released a report last month on the Silicon Valley high-tech industry.
The report, titled "Crash and reboot: Silicon Valley high-tech employment and wages, 2000-08," shows a sharp decline in employment and wages from 2000 to 2004, followed by a gradual increase from 2004 to 2008. The growth is fueled by continued growth in the pharmaceutical industry, biotechnology and green technology, Mann said.