OLYMPIA FIELDS, Ill. | A senior portfolio manager for the MB Financial Bank says he is optimistic the economy will continue to improve, even though the evidence of improvement in recent months has been miniscule.
Spencer Klein, who has 17 years of investment management experience, told a gathering of south suburban business officials organized by the Prairie State College Foundation that there are various signs of economic improvement, including job growth and housing construction.
But, Klein also cited the fact that the gross domestic product increased during the last three months of 2012 by 0.1 percent, compared to the same period the year before.
“That’s like no growth at all,” Klein said.
But he also pointed out that the period coincided with the time period in which Congress and President Barack Obama were concerned about the “fiscal cliff” option that would have forced mandatory spending cuts on all government programs.
As a result, Klein said many businesses that rely on government contracts were cutting their activity back to prevent themselves from being hurt by the fiscal cliff option that wound up not occurring.
“There could be a surplus of activity in January and February, although we’re still in a slow growth mode,” he told the group that gathered for breakfast at the Olympia Fields Country Club.
Klein also cited statistics indicating that about 155,000 non-agriculture jobs were created during December. While that is less than the roughly 400,000 jobs that would be created if the economy were thriving, Klein said it was still better than what analysts had expected.
“It’s not as strong as it could be,” Klein said. “It is a drag (on the economy), but one that is slowing down. It’s getting better.”
Another sign of improvement relates to the housing market, which Klein said showed its strongest three-month totals for the end of 2012 since the autumn of 2008.
“So few homes were built between 2008 and 2010 that it has created a situation where so many homes now need to be built just so we have enough housing,” Klein said. “Housing is no longer a drag on the economy. People are starting to spend money to fix things up around the house. Actually, it’s a lot higher.”
Overall, Klein cited an unemployment rate of 7.9 percent for January, which he said is better than the nearly 10 percent unemployment rates of two years ago.
“We’d like to see it improve at a faster and stronger pace,” he said.
Klein also included some analysis of foreign economies in his report, particularly citing statistics that showed 2012 to be a good year economically for Great Britain. But he said much of that was due to the presence of the Olympic Games in London, which means it will not last.
Pointing out that Chicago failed in its bid to host the 2016 Summer Olympics, Klein said, “it would have been fun (for Chicago), but we’ll get over it.”