toledoblade.com --

Noted economist Stuart Hoffman told a large crowd of Toledo-area civic and business leaders that the economy is improving, and the private sector should start adding jobs again early next year.

Mr. Hoffman, chief economist and senior vice president for Pittsburgh-based PNC Financial Services Group, parent of National City Bank, told several hundred invited guests yesterday that any economic recovery is really going to be more of a convalescence.

"After the degree of either injury or illness that the economy has suffered over the last couple years, it is going to take a while - as it would for any of us - to get back to a sense of normal health," Mr. Hoffman said, "but I think we're moving back in that direction."

Mr. Hoffman, a former economist for the Federal Reserve Bank of Atlanta, echoed Obama Administration officials who argued last week that while the nation's gross domestic product may be growing again, confidence won't return until businesses stop shedding jobs and start hiring again.

"It won't feel like a recovery until we start to create jobs. We're not there yet, but we're starting to get close to that," said Mr. Hoffman. He predicted national unemployment will rise, likely reaching 10 percent, before starting to fall and the nation starts adding jobs in early 2010.

Mr. Hoffman predicted a modified "U"-shaped recovery, with a sharp decline, a rounded bottom, and a long, drawn-out recovery. He said a double-dip recession remains a risk, but a gradual, sustained recovery "is a much more likely outcome."

He credited the $787 billion government stimulus plan passed this year with staving off another Great Depression, pulling the economy away from the precipice of economic collapse.

However, he warned that there are limits to what government can do to help the economy.

"The public sector can initiate or be a catalyst for recovery. They can't sustain it, unless there is a hand-off - without a fumble - between the public sector and the private sector, those small and large businesses in this room, that create the jobs," Mr. Hoffman said.

"I do believe that by the first quarter, we will see some job growth."

Mr. Hoffman noted that any economic recovery remains under threat from spiraling inflation or price spikes in the price of oil, and that credit markets, while they have eased somewhat, still remain tight.

Contact Larry P. Vellequette at:
lvellequette@theblade.com
or 419-724-6091.

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