Economists give 2010 forecast for business leaders

January 28, 2010 8:22:23 PM PST
Patience. That's what the chief economist of a major national bank is asking of President Obama, Governor Schwarzenegger and other political leaders as they make urgent calls for job creation.

It's an urgent message that Schwarzenegger brought to members of the San Jose Silicon Valley Chamber of Commerce.

"Jobs, jobs, jobs. That is the most important thing," he said.

In his State of the Union Address, Obama also made job creation one of his priorities. And even before the politicians can do anything about it, we're hearing a job recovery may be in sight.

"I see all sorts of evidence that the job growth we're all hoping to see is imminent, and I expect significant growth in jobs over the course of 2010," Comerica Bank Chief Economist Dana Johnson, Ph.D. said.

Johnson shared his forecast with Silicon Valley business leaders on Thursday. He sees several indicators flashing green for the labor market which include:

  • New claims for unemployment insurance are trending lower
  • Surveys of company hiring plans are improving
  • Layoff announcements are down
  • And hiring of temporary workers has picked up, often a precursor of permanent hiring
Johnson is predicting national unemployment will fall every quarter this year, dropping below 10 percent by mid-year. And that California's rate, about 2 percent higher than the national figure, will start to track national trends.

Lawrence Goulder, chairman of Stanford's Economics Department, also spoke at the Comerica conference. He thinks the president's proposal to channel $30 billion to make small business loans will also help.

"They often have more difficulty obtaining credit, so if we can liberalize the credit system so that it's easier for small businesses to get capital and make up the difference between their access and that of larger businesses, I think that would be beneficial," Goulder said.

Both economists see the focus on green technology in Silicon Valley also helping with future job growth.

More good news on the job creation front could come Friday with the release of the gross domestic product. That figure is expected to go up.