Overland Park, KS – The Kansas City region is expected to shed fewer jobs in 2010 than thus far into the recession. But the message is mixed. Greater Kansas City Area Chamber of Commerce got its annual economic forecast from the regional council.
Analyst Frank Lenk believes, at best, economic output will be sluggish next year, but recovery in jobs and income will be slower. His best case adds 4,000 jobs. The longer recession scenario sees job losses added to the 31,000 lost this year.
As Lenk described it-- " as a result, we still lose about 13,000 jobs or so next year. And then we gain about 18,000 jobs in 2011."
In Lenk's "weaker recovery" scenario, the region reaches levels of employment it had at the end of 2007 in the year 2013. In the brighter outlook for the region, real personal income should surpass end of 2007 levels by 2.2 percent by the end of 2011. The region lost some 33,000 jobs between the fourth quarters of 2008 and 2009.
Under the baseline, best outlook, the region's employment levels are expected to drop 4.3 percent from time the recession began before beginning to reverse that trend in the second quarter of next year.
Real personal income doesn't drop as far as employment, declining 3.3 percent from its pre-recession peak by fourth quarter this year. Lenk says this is due partly to the automatic stabilizers that replace part of worker income when they lose their jobs and partly due to the fact that most people still working still receive raises.
It is rare, in fact, for total real personal income to actually recline, even in a recession. In Lenk's estimate, it is a mark of the severity of this recession workers are in essence accepting pay cuts in form of some combination of fewer hours, wave freezes and furloughs ( i.e. mandatory leave without pay).