Why is the United States still experiencing a slow economic recovery five years after the Great Recession was declared officially over by economists?

The aforementioned question, raised at the beginning of the program by emcee and UNC Asheville economics professor Joe Sulock, was the focus of more than a little speculation during the 30th annual UNCA Economic Crystal Ball seminar April 17 in the school’s Lipinsky Auditorium.

As the seminar progressed, two economic forecasters, James F. Smith and David W. Berson, shared their views on the good, bad and ugly of a sluggish-but-steady recovery that has yet to reach even the average annual growth and has been widely characterized as a “jobless recovery.”

And, on the bright side, both analysts predicted — given current trends — faster growth in the economy, albeit nothing of major magnitude. 

After welcoming guests to the seminar, Sulock, founder of UNCA’s Crystal Ball series,  noted that there are “a lot of interesting things happening in the economy... We’re allegedly having a recovery. It’s legitimate to ask why it’s not recovering very fast.”

Smith, chief economist with Asheville’s Parsec Financial, said that in the widest of contexts, the situation is not as bleak as it might appear. Specifically, he said, “Bottom line — if we had daily seasonal date on world economic activity, today would be the best day in the history of the world, and tomorrow would be better. Is it perfect? Of course not.”

(Smith’s employer, Asheville-based Parsec, hosted the event, along with UNCA. Parsec is billed as North Carolina’s largest private wealth management firm.)

“The bad news?” Smith asked, rhetorically. “We’re having the slowest expansion (in the U.S. economy) in 110 years. You’d have to go to the 1880s to see a worse economic expansion.”

Berson, chief economist for Nationwide Financial, added that, although the American economy has been ravaged by an unusually cold, snowy and icy winter, consumers and businesses should soon catch up on weather-delayed spending.

“By any standard, this has been the weakest (U.S.) expansion ever,” Berson said. “But there is something to look forward to. We expect the economy to pick up to around the average rate of growth of around 3 percent.”

Berson added, “We project an average monthly gain of 210,000 (jobs) per month in 2014” — the fastest pace in a slow recovery that’s five years old.

“Also, look for the Federal Reserve to slowly increase historically low interest rates. A zero rate federal funds rate is not sustainable,” Berson said.

Earlier in the seminar, Sulock said that when UNCA staged its first Crystal Ball Forum in 1984, Ronald Reagan was going into his second term as president and the Dow Jones stock index was at 1,157.

Thirty years — and four presidents — later, the Dow Jones average closed at 16,409 on April 17.

Sulock noted that “the Crystal Ball (series) has become a phenomenal tradition” in Western North Carolina. 

He added that, in the spirit of a “‘throwback Thursday,’ in 1984 Apple introduced a Macintosh computer, the marathon was won by a Brit, the soundtrack from ‘Footloose’ unseated ‘Thriller.’ My personal favorite, is OJ Simpson starred” in a car commercial.

After a pause, Sulock said, “History tells us a diversified portfolio would have served one well” over the past 30 years.

As for this year’s program, he said the purpose was to give “the business and financial outlook through 2015.”

Sulock also asserted, “A number of issues come to mind. For example, we’re allegedly having a recovery.. Why’s it taking so long to recover? We have a new leader of the Fed (Janet Yellen) .... I understand the Fed is thinking about low inflation. It’s an economic malaise that’s affected Japan for many years....

“Regarding short-term rates, to use a line from an old ZZ Top song, ‘I’m Not Asking for Much.’” (To the crowd’s delight, the economics professor admitted to being a fan of ZZ Top.)

At that point, Sulock said, “We’re fortunate to have with us tonight Jim Smith and Dave Berson, who are definitely two eeconomists extraordinaire. While these guys aren’t perfect, they’re, indeed, very, very good.”

Speaking first was Berson, who is a graduate of Williams College and went to graduate school at the University of Michigan, where he earned a masters in public policy and a doctorate in economics.  “He worked for Wharton Economics, which is like having played for the New York Yankees; Fannie Mae, and he is presently senior vice president and chief economist at Nationwide Insurance,” Sulock noted.

“As an economist he was honored for being the top forecaster for the Wall Street Journal. He expressed concerns about the housing market — about 12 months before the entire housing market collapsed.

“He also has had an interest — dare I say passion — for baseball. He said he is constantly humbled by the bad forecasts he sees in economics and baseball,” Sulock said of Berson.

On a lighter note, Berson said, “I do remember that Wall Street Journal article, but there’s one I remember even better — that was when I was on the front of USA Today’s sports page. They had a story on fantasy baseball. I had to admit to them that my thick briefcase mainly had information valuing baseball players. I think the models we had for valuing baseball players” were better than than those for economics.

“OK, what’s going with the economy?” he asked. He noted that “real GDP (gross domestic product) growth” provides “a great thumbnail of the whole economy — plus, when you get an economics degree, you have to promise you’ll always talk about GDP.”  The crowd laughed.

His presentation showed the recovery — to date — with “four bars upward, but none of them reaching 3 percent. This is the worst recovery ever.”

However, Berson said his date shows “there is something to look forward... the blue bars (2014-2018)... at or around the 3 percent rate” for the next few years.

Unemployment is close to 7 percent, he said, “so the economy could in fact grow much fast now, but it’s not. The good news is all the blue bars are higher than all the bars during the Great Recession.”

However, Berson warned, “When we get first-quarter GDP numbers, it’s going to be atrocious. Many of you know it’s been a cold winter. People went out and shoveled snow a lot — and huddled in their homes. They did not go out and shop... We may see GDP growth of half of 1 percent. Almost all of that slowdown in the economy came from the bad weather.

“The economy really looked like it was picking up in the third quarter of last year, until December, when the weather got really bad. A lot of activity that could have happened early in the year, will probably happen in April and May,” Berson said.

“The trend growth in the economy is probably between the two and moving upward.  Maybe 2.5 percent. Second half of the year, we may see growth around 3 percent and that’s we expect to see for the next two or three years.

Speaking second, Smith agreed with Berson’s assessment that the first quarter GDP number is going to be week. “Two weeks from yesterday, the consensus is 1.9 percent... So some number between 0.5 and 2.3 percent is what’s going to show up. It’s becoming clear that it’s because of the weather.”

Smith added, “We haven’t had a 3 percent year in a decade, so we’re overdue. If we reach 3 percent (GDP) for this year, that would be good not just for the United States, but for the world economy.”