Economist Brewbaker predicts no recovery until 2011

Hawaii economist Paul Brewbaker and other experts are forecasting that the state won’t see meaningful recovery from the recession for more than a year. Brewbaker, a consultant for the Bank of Hawaii, predicts there will be higher unemployment and a greater decline in personal income than cited in other economic forecasts.

“Slow recovery seems likely to leave unemployment rates unchanged until 2011,” Brewbaker, the bank’s senior economic adviser, wrote in the forecast on the bank's website in late October. “A jobless recovery like the one in 2002-03 is a likely scenario at least in 2010.”

 Brewbaker predicts the state’s jobless rate will end in 2009 at 7.9 percent and rise to 8.4 percent next year. A former bank economist who now has his own firm, TZ Economics, Brebaker said job losses during this downturn were larger and happened faster than during previous downturns.

“Job loss during Hawaii’s ‘lost decade,’ the 1990s, pales by comparison to 2008-09 and took many more years to unfold,” he wrote. “This time, 30,000 private jobs in Hawaii have been eliminated in 18 months – a speed and size record.”

Brewbaker forecasts Hawaii jobs to fall 2.9 percent this year and another 1.3 percent next year.  He also expects personal income to decline by 2.5 percent this year, more than twice the 1.1 percent decline predicted by University of Hawaii and the Department of Business Economic Development and Tourism.