Economist tells Southland business leaders he’s optimistic about economy
By Mike Nolan firstname.lastname@example.org January 14, 2013 8:44PM
Adolfo Laurenti, deputy chief economist with Mesirow Financial, speaks on Jan. 14, 2013, to members of the Chicago Southland Chamber of Commerce during the business group's meeting in Tinley Park. | Mike Nolan~Sun-Times Media
Updated: February 16, 2013 6:18AM
Like the new year’s resolution to lose weight, the annual promise the last few years of a rebounding economy has started with earnest intentions only to falter after a few months.
So when Adolfo Laurenti, deputy chief economist with Mesirow Financial, told Southland business leaders Monday that he’s a “little bit more optimistic” this year about an improving economy, some audience members probably couldn’t help but feel a sense of deja vu.
Laurenti acknowledged that beginning-of-the-year forecasts the past three years haven’t panned out and warned that for all the positives the economy has going for it, there’s still an abundance of negatives that could derail a recovery.
“We are not completely out of the woods,” he told members of the Chicago Southland Chamber of Commerce in Tinley Park.
Laurenti said the housing market “has always been crucial” to the economy’s recovery following a recession, but that damage this time was “such that there was no easy way out.” The sales pace and prices are rebounding from such low levels that even modest improvements appear to be significant gains, he said.
“Almost everywhere there is some sign of stabilization” in the housing market, with a “firming of prices” taking hold, Laurenti said, and while he’s not ready to declare that sector hale and hearty, “we are beginning to get there.”
Laurenti said in the private sector businesses still are reluctant to hire in larger numbers or invest in new equipment. Some of that is because consumer demand for their products remains lackluster, and business investments won’t improve until consumers “spend with a little bit less of constraint,” he said.
On the employment front, Mesirow’s outlook is “somewhat uninspiring,” Laurenti said, with the firm expecting 2013 to end with an unemployment rate of around 7 percent, although monthly job-growth numbers should improve during the second half of the year.
The biggest impediments to economic growth are the fiscal challenges that Congress has continued to sidestep, Laurenti said. While Congress was able to avoid automatic tax increases that would impact millions, lawmakers have yet to agree on substantive spending cuts aimed at reducing the federal deficit, and a soaring debt load is cause for worry, he said.
“The time to get our (financial) house in order is now,” Laurenti said.
He said health care costs continue to rise at what he calls an “unsustainable pace,” and he’s not convinced that all elements of the federal health care reform law, commonly referred to as “Obamacare,” can be implemented.
“I don’t think we have seen the final word on health care reform,” he said.