(Host) Commentator Tim McQuiston says that Vermont’s economic tea leaves have been looking a bit more encouraging lately.
(McQuiston) Predicting the economic future of Vermont the last few years has been like predicting the weather in spring in any year. Your guess is as good as mine, and we’ll probably both be wrong.
State economist Jeff Carr gets to predict the economic weather twice a year with his New England Economic Project, or NEEP, report. Carr’s bottom line is that sluggish growth this fall will result in more traditional economic expansion early next year. And he means it this time. The quick-witted Carr used some self-deprecating humor when recently announcing the results of his analysis. He admitted that maybe the third time will be the charm as far his economic forecasts are concerned. In his last two reports, he predicted that same slow recovery that didn’t happen.
Even though the economic indicators in Vermont for the last year keep suggesting economic recovery, the national economy keeps bogging down. In fact, coinciding with Carr’s report was that the US unemployment rate hit a nine-year high in May to 6.1 percent. That news was quickly followed by a report that the federal annual budget deficit would reach a record 400 billion dollars this fiscal year.
The Vermont economy tends to react slowly to national economic conditions and with less zeal. Recession usually gets here a little later, doesn’t get quite as deep and then hangs on a little longer. Economic conditions tend to not be as bad in Vermont, nor do they get as good. For instance, Vermont’s unemployment rate tracks about two points lower than the national rate, on the one hand, but on the other, state average wages are consistently below the national average.
Vermont has a truly diverse economic structure. No other New England state, for instance, has a prominent agricultural component. But Vermont traditionally is also
relatively poor. Only Chittenden County has an average wage higher than the state average. That tells you something about Vermont, as well as the Burlington area.
And as far as predicting Vermont’s economy, Jeff Carr might need his famous sense of humor more than he wants. There’s not only those negative national factors to consider, but there’s still that ugly peace in Iraq, a federal tax cut that will either raise all the boats, or sink them, and continuing questions about IBM’s future in Essex Junction.
But what does appear to be true is a general sense that things are getting better, both locally and nationally. In Vermont, job growth is healthy except in manufacturing, and tax revenues have increased. And beyond indicators like manufacturing employment and consumer confidence, there’s a sense that the worst, like the spring weather, is over.
This is Timothy McQuiston.
Timothy McQuiston is editor of Vermont Business magazine.