March 13, 2009
UI economic forecaster sees continued slowing in Iowa economy
Employment in Iowa will likely continue to decline and incomes will remain stagnant for the next two years, according to a new projection by University of Iowa economics forecaster John Geweke.
Geweke's report, issued today in Des Moines by the University of Iowa's Institute for Economic Research, projects employment losses of 2.3 percent for 2009 and a continued loss of .8 percent in 2010.
Real personal income will see a small increase of .2 percent in 2009, and grow by only 2 percent in 2010.
But Geweke warns those numbers might be optimistic. Although he made his forecast using the most recent data available, much of it is still several months old. When new numbers are reported, he expects to find further evidence of deterioration in the state's economy.
For instance, he said, the state's revenue income figures are current only through September, "and in today's environment, that's a long time ago.
"Economic conditions in the nation and the state are changing at an unprecedented rapid rate," he said. "It is likely that data not yet received for recent months will reflect further deterioration in the economy, which may further reduce projected revenues."
But Geweke notes that compared to other areas of the country, Iowa's state finances are downright rosy.
"As bad as this looks, it is still gentler than what they're experiencing in other states," he said.
Geweke is a professor of economics in the Tippie College of Business and Harlan E. McGregor Chair in Economic Theory in the Department of Statistics and Actuarial Science in the College of Liberal Arts and Sciences.
The Institute for Economic Research serves Iowans as an advisory group to the Governor's Council of Economic Advisors. The council's discussions are, in turn, used by the state's Revenue Estimating Conference in determining the official prediction of the rate of growth of tax revenues for the coming two fiscal years. The Board of Regents created the institute in 1975 to facilitate cohesive and continuing economic research, and to establish a formal mechanism for providing interaction with, and economic research services to, government and industry. Each quarter the institute produces the Iowa Economic Forecast, which contains quantitative forecasts of economic conditions and tax revenues for the State of Iowa using the latest advances in econometrics.
STORY SOURCE: University of Iowa News Service, 300 Plaza Centre One, Iowa City, Iowa 52242-2500
MEDIA CONTACTS: Tom Snee, University News Services, 319-384-0010 (office), 319-541-8434 (cell), email@example.com; John Geweke, Institute for Economic Research, 319-335-0857