Economic Outlook For 2013 [AUDIO]
Despite the recent hit from Sandy and the looming plunge over the "fiscal cliff," a Wednesday banking symposium in Manalapan was offered a positive forecast for the economy in 2013.
"I think we have a pretty good outlook for next year," said Loretta J. Mester, Ph.D. with the Federal Reserve Bank of Philadelphia. "I'm optimistic that the government will get its act together and get us beyond the cliff."
Without action before the end of the year, January 1 would bring with it spending increases and the reversal of tax cuts. Federal lawmakers and the President have expressed confidence in a deal before Christmas, but the negotiations would need to include sacrifices on both sides of the aisle.
Mester said avoiding the cliff can relieve uncertainty and spur economic growth in 2013.
"Businesses feel a little more confident; they start spending again. Households continue to improve their balance sheets; job growth encourages them as well; they spend," Mester explained. "All those pieces together, the outlook is actually not bad, given how far down we were."
New Jersey's economy took an immediate and massive hit from the recent superstorm, creating more concern within the industry.
Fifty percent of the state lost power for at least two days; a quarter of the state was without service for at least a week.
"If you think about, not only destroyed property, but also business activity that was destroyed, these are significant effects," said Mester.
Auto sales, among other economic measures, understandably registered significant losses following the storm. Mester, though, said much of those losses should rebound come early next year.
"We think (Sandy) will take off some growth in the fourth quarter, and then in 2013, we'll see some of that made up," Mester explained.