Balancing security and the desire for expanded trade is an increasingly tall order for Mexican and U.S. officials. HISPANIC BUSINESS® magazine
While most members of the Hispanic Business Board of Economists (BOE) expect the U.S. economy to continue its slow recovery, with tame inflation and stable unemployment, some forecast worsening Hispanic joblessness, declining revenues at Hispanic-owned firms, and a drop-off in U.S.-Latin America trade.
Overall, survey respondents expect the Hispanic economy to improve moderately. However, a significant number of board members predict a slight downturn in the collective economic fortunes of U.S. Hispanics. Trends stemming from the September 11 terrorist attacks that were cited as potential short-term stumbling blocks to the Hispanic economy include tighter immigration restrictions and higher insurance premiums.
Regarding the U.S. economy, board members are generally upbeat.
“It appears that the longest economic expansion [10 years] in U.S. history has been followed by probably the shortest and shallowest recession,” says Frank Chow, chief economist at Hispanic Business Inc. and director of HispanTelligence. In fact, he says, there is still some question whether the nation’s recent economic slide should be recorded as a recession, as it does not meet the traditional definition of two consecutive quarters of declining real Gross Domestic Product (GDP).
Because the recession was so muted, economists and business forecasters have been debating how robust the ensuing recovery will be. Most prognosticators, following the lead of Federal Reserve chairman Alan Greenspan, have concluded that the recovery will not resemble the “V” pattern of most past rebounds – a steep decline followed by a dramatic upturn. The main doubts are whether consumers will continue to spend and if the improved conditions are sustainable.
Economists and Wall Street analysts have been surprised by the magnitude of improvements in the economy, according to Mr. Chow. Payroll employment unexpectedly shot up 66,000 in February after months of job losses. Most of the gains were in retail trade. Unemployment among Hispanics improved dramatically in February, dropping from 8.1 percent to 7.1 percent. Consumer sales, housing starts, and building permits are all rising, and businesses have begun restocking inventories for the first time since before the recession began.
“In all, the survey would seem to support a cautiously optimistic outlook for the overall U.S. economy, and a somewhat more restrained view with regard to U.S. Hispanics’ prospects,” says Mr. Chow.
Click here to view the full results of the 2002 Hispanic Economic Outlook