Economist predicts economic growth despite poor job market

With a record audience of 400 people, UNC Asheville's 25th annual Economic Crystal Ball Seminar filled Lipinsky Auditorium as students and Asheville residents listened to the predictions of our current economic recession.

"By the end of this year, we will be out of this recession; we will see positive economic growth at the end of the fourth quarter," economist David W. Berson said. "The bad news is things like unemployment rate won't look like it's over. The unemployment rate could get to 9.5 percent or so at its peak and could go a little higher."

Noted economists Berson and James F. Smith spoke. The economics department and Parsec Financial sponsored the seminar, which began with a reception, followed by the speakers and a question-and-answer period.

The event was free and open to the public.

Master of Ceremonies for the night economics professor Joe Sulock, introduced the speakers, and said Berson and Smith are to economics as Huntley and Brinkley were to newspapers.

Michael E. Bruder, senior financial advisor at Parsec Financial, attended the event and offered advice to students trying to pay loans.

"Don't get into anymore debt, no credit cards," Bruder said. "Small amounts can help. For instance, Starbucks coffee, wonderful coffee, but if you give it up, take that money and put it aside, you may be able to use that money for monthly payments."

Bruder received his undergraduate degree in social work and a master's in counseling from Western Carolina University, but now he works with money management.

"Right now to pay down debt, do not take any risks. Put your money in a savings account, money market, checking account or a certificate. You're not after getting a high interest if your interested in keeping the money safe," Bruder said.

Our society says to spend, spend, spend, according to Bruder, and students should not fall into the habit of spending.

Berson of the PMI Group explained to the audience his cell phone was on vibrate, waiting for the New York Times to call him for an interview.

Later he walked off the stage, and took the call, as James F. Smith was talking.

"The recession that we are in now began in December of 2007," Berson said while talking about his last forecast.

The economic outlook portion of the program focused on inflation, employment, interest rates and the strength of the dollar and housing market.

"We have a huge excess of inventory of homes for sale. The last thing we want is for builders to build more," Berson said.

Berson, a former vice president and chief economist at Fannie Mae, was the president of the National Association of Business Economists. He was also chief financial economist at Wharton Econometrics Forecasting Associates and a visiting scholar with the Federal Reserve.

"Home sales have probably already bottomed," Berson said. "The trend is now upward. The housing market can recover before the job market does, but it usually doesn't recover strongly until the job market does."

Smith, the chief economist at Parsec Financial, resides in Arden and says he and his wife love living in the Asheville area. The Wall Street Journal named him the best economic forecaster twice.

"U.S. voters are impatient. If the current guys in office do not fix this mess in two years, we will have a Republican president after the next election," Smith said.

Smith noted that when consumers feel better, they spend more, and that will be the job of small business owners' positive attitudes. He has more than 25 years of experience as an economics forecaster and his career spans private industry, government and academic institutions including tenures with Wharton Economics, Union Carbide and the Federal Reserve.

"Small businesses are the backbone of the U.S. There are about 27 million of them," Smith said.

Smith predicts the U.S. will bounce back from the recession first, China second and then Canada, but Europe has a long way to go.

"If you think it's bad here, go somewhere else in the world; its far worse."

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