Business leaders optimistic about state’s economy
November 17, 2004
Radiating optimism and gesticulating on the present and future state of the country’s economy, U.S. Bancorp Senior Vice President John Mitchell unwrapped mostly happy tidings for Nevada business leaders at a Wednesday breakfast meeting.
Just in time for the holiday season, Mitchell delivered several economic high points to the joint membership meeting of the Northern Nevada Development Authority and Business Council of Douglas County.
“The expectation is that Nevada will continue to grow and grow rapidly,” he said.
But he did caution business members that the high cost of energy, including the increasing cost of crude oil, will affect how much consumers are willing to shell out on Christmas gifts.
Mitchell paced in a semicircle in front of tightly packed tables at the Carson Valley Inn in Minden. Speaking off-mic, he praised Nevada’s various economic statistics while zipping through a PowerPoint presentation.
He said 47 states had job growth as of September, and Nevada was No. 1 on that list. Nevada also had the highest rate of home appreciation.
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According to the Office of Federal Housing Enterprise Oversight House Price Index, Nevada’s second quarter increase of 7.53 percent was greater than the increase over the entire past year for a majority of states.
Mitchell said an increase in consumer spending in the last three years could be traced back to the Bush Administration’s tax cuts.
“So, even if you didn’t get a raise you still got more money in your pocket,” he said.
In the last year employment was also up slightly, Mitchell said, which came out to more than 2 million jobs. The only decline was in the information sector, which includes software, newspapers and telecommunications. Nevada was one state that didn’t have a decline in the information sector.
He also said manufacturing was up slightly, even though manufacturing employment has been on a downward spiral since the 1980s. That spiral includes other countries, such as China and Japan.
“This is a long-term pattern because of the rapid increase in productivity,” Mitchell said.
He said inflation isn’t a big concern now and probably won’t be in the future. The FED puts the inflation rate between 2 and 3 percent. He said the Gross Domestic Product in 2004 was up, from 4 to 4.5 percent, and in 2005 that percent will probably be between 3.2 and 3.7 percent.
“I think what we’re going to see happen is the FED will withdraw stimulus,” Mitchell said.
Stimulus includes interest rates and tax cuts that are often employed to stimulate the economy. He quoted a saying that the FED’s job is to remove the punch bowl before the party gets out of hand, which got a laugh from the audience.
He said Nevada has good news in store. The state will continue to benefit from the “California centrifuge” throwing off businesses. Baby boomers will also come to Nevada for retirement.
He ended the meeting with a caution, what he called “the moral issue of our time.” Mitchell said the government has promised more to impending retirees than what it may be able to provide come 2008, when more than 50 percent of Americans will reach 62. Mitchell said this problem has always been thought of as on “the next person’s watch.”
“Well, we just elected the next guy,” he said.
Peter Fishburn, account executive at Brown & Bigelow, said after hearing Mitchell’s economic outlook he feels confident.
“I’m optimistic,” he said. “I think Nevada is moving forward. We have a good economy here now.”
Contact reporter Becky Bosshart at email@example.com or 881-1212.