IWILEI (KHNL) - The continuing downward spiral on Wall Street is taking its toll on Main Street, or more specifically here on Oahu on Bishop Street.
All of Hawaii will have to tough it out in 2009 before a potential economic recovery in 2010 and beyond.
That's the prediction of First Hawaiian Bank's longtime forecaster, who presented the bank's 39th economic outlook today.
Hundreds of Oahu's most powerful and influential business leaders hear news that is not terribly surprising.
"I think the Hawaii economy is in a recession right now and that recession will continue for 2009," said Dr. Leroy Laney, an economist.
After a rougher than expected 2008, most sectors continue trending downward next year.
Laney predicts job growth in Hawaii will be down 1.2 percent from a third of a percent this year.
Unemployment will rise to 5.5 percent from 4.2 percent estimated in 2008.
Inflation will drop from an estimated 5 percent this year to 3.5 percent.
Visitor arrivals, while still lower than normal, won't be as bad as this year, down from minus nine percent to minus five percent.
And real personal income is forecast to drop a half percent from one, to one and a half.
And while we shouldn't necessarily embrace the word recession, Laney says it's important we acknowledge it."
"There's something that has a negative connotation about the "R" word, people don't like to use that, but I think we need to go ahead and and call it what it is. If we continue to dance around it all were going to do is lose credibility," said Laney.
Laney believes downturns in the economy don't last as long as expansions; about half as long.
And while 2009 will be a year of continued economic struggles for Hawaii and the rest of the country, he and other economists predict a recovery by mid 2010.
"Things are going to go back to normal with 2 to 3 percent growth so ride it out," said Robert Dekle of the University of Southern California. "And as long as you have a job things are going to improve in nine months to a year."
A couple of bright spots of note.
First Hawaiian Bank reports it loaned $1.2 billion in the first nine months of this year.
And despite the fragile financial system in some places, it is not changing its lending criteria.
And it's tracking of credit card spending at 300 of its largest merchant customers shows spending is flat so far this year .
In other words, if it isn't down in an economy like this, that's good news.
Saturday, July 22 2017 3:23 AM EDT2017-07-22 07:23:51 GMT
Sunday, July 23 2017 11:02 AM EDT2017-07-23 15:02:50 GMT
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