From the Star Ledger:
The regional economy will go through tough times for several more years before it emerges from the post-recession slump, two economists said Tuesday.
The state and nation are unlikely to suffer a so-called double dip, but there are “massive challenges ahead” said Alexander Heil, chief economist of the Port Authority of New York and New Jersey.
“There are little bits of information that are positive; lots that are still negative,” he said.
Nancy Mantell, director of the Rutgers Economic Advisory Service, said a forecast she undertook in July indicates that the state will not to return to its pre-recession employment peak until 2016.
Employment will increase at a lackluster 25,000 jobs a year until 2020, she said. That’s well below the about 70,000 jobs added annually after the 1990-1991 recession.
Heil said one problem standing in the way of the recovery is the high consumer savings rate, with the average person now saving 6 percent of disposable income.
“As long as savings remain high, there may not necessarily be consumption-driven growth that will bring us out of the recession,” he said.
But the state will likely have to shed many local government jobs to return to health, she said, noting that public sector employment continued to grow throughout the last 10 years.
“The private sector is going to have to grow significantly to make up for that loss of employment,” she said.