Uncertainty is a consistent theme among economists these days, with each round of projections for Vermont's plight worse than the last.
Columnist Robert Samuelson explained to the audience at a Vermont economy conference in early January the only other national economic experience like this was the spiraling inflation of the 1970s because, like now, people could not see where it would end.
State economists Jeff Carr and Tom Kavet anticipate this will surely be the longest and deepest recession since the Depression. No leading indicators are pointing to a recovery any time in the near future, they explain. The worst part of this recession is still to come in Vermont and will likely occur in 2009 as losses in Vermont's retail sector peak, according to their latest forecasts.
Forecasts show the Vermont unemployment rate is likely to reach a high of 7 to 7.5 percent in 2010. Art Woolf estimates 5,000 Vermont jobs were lost in 2008 and another 4,500 will be lost in 2009. Construction employment has been the hardest hit so far, although additional losses in the thousands are also expected for Vermont's manufacturing and retail sectors.
Vermont's employment and housing market declines are both expected to be less severe than for the U.S. as a whole. Median Vermont home prices remained constant between 2007 and 2008, despite falling prices in many other states. Jeff Carr predicts a small dip (2.7 percent) in 2009 before Vermont home prices level off again in 2010.
Although Vermont's recession is not likely to be as deep as elsewhere, the timing of our recovery is expected to mirror the U.S. in many respects.
Chart source: Gustave Faucher, Moody’s Economy.com