As he's done for over 40 years, Mario Belotti, Santa Clara University's esteemed professor of economics, took to the stage in early February, at events in both Santa Clara and San Francisco, to offer his economic forecast for the upcoming year. Belotti's annual forecast has garnered a large following among Bay Area business leaders, bankers, and non-profits.
And what does he think 2012 will look like? It might just be a little bit sunnier.
Increases in exports and consumer spending should grow, helping to boost the Gross Domestic Product by at least 2.5 percent. Employment is also increasing. "Everybody is hiring around here, almost everybody," says Belotti. "The problem we've had, probably, is more situations where jobs are available but people don't have the skills to [get] the jobs." And jobs aren't just increasing in the Bay Area, but across the country.
He went on to note that the money supply grew at a robust 10 percent after more than two years of stagnation. Business loans are also increasing after being stagnant and the stock market has been picking up steam. This gives a good indication that the economy is in much better shape than most people believe.
Belotti expects that inflation will stay the same this year, about 2.5 percent, and that interest rates will stay low, per an announcement by the Fed, until unemployment drops below 7 percent. Currently unemployment is at 8.5 percent.
You can view a video of Belotti's forecast speech here.