Andrew Edwards, Staff Writer
Posted: 03/12/2010 05:38:32 PM PST
The Inland Empire may continue to be mired in a slow economy for the next few years, although some economists greeted a new report of increased retail sales across the United States as a sign the nation could be climbing its way out of recession.
The U.S. Commerce Department reported Friday that retail sales across the country rose 0.3 percent in February from the previous year. The report signified the fourth time in the past five months that retail sales increased.
But a possible gleam of light on the national level doesn’t erase the fact that the Inland Empire is still struggling, economists said.
“The worst is behind us. I’ve said that before, but that doesn’t mean the bad is behind us,” said Brad Kemp, director of regional research at Beacon Economics’ office in Los Angeles.
The housing market remains one of the Inland Empire’s biggest problems, Kemp and others said. He said more than half of the region’s mortgages are upside-down.
Regional unemployment also remains high, and the state Economic Development Department reported Wednesday that unemployment in the San Bernardino-Ontario-Riverside area reached 15 percent in January. Kemp and Cal State San Bernardino economist Thomas Pierce, however, noted that the pace of job losses has slowed in recent months.
“We’re not burning off the jobs anymore,” Pierce said.
The local economic picture is not all bad. In Fontana, a 56-home development called Harmony at CenterStone Estate is expected to be completed in July.
The Santa Ana-based developer, CenterStone Communities, has about 700 people working on the project and is advertising the homes as San Bernardino County’s first-ever neighborhood to be powered with solar panels.
“We’re going to see more of that,” Pierce said, meaning that he expects to see a gradual improvement in the Inland Empire’s job situation. “Maybe if we’re lucky, by the end of the year, people will feel that the job market is getting better.”
Other potential signs of improvement include Kohl’s announcement that the department store chain plans to hire some 500 employees when its new San Bernardino “e-commerce distribution center” opens.
That opening is scheduled for June. John Husing, owner of Economics & Politics Inc. in Redlands, mentioned the Kohl’s development as one positive for the region.
Husing, however, also described the region’s unemployment rate as “dismal” and said the housing market needs government intervention on the scale that the federal government gave to Wall Street.
He said the so-called “cramdown” proposal, which would have allowed judges to reduce the amount underwater homeowners owe on their mortgages, would have benefitted the Inland Empire.
“They took really good care of Wall Street and they prevented a repression,” Husing said, adding that the Obama Administration’s advisors are drawn from Wall Street and “they haven’t paid attention to homeowners.”
On a national level, interpretation of the new retail data was up for debate. The possibility that American consumers may now be better able to purchase goods than during previous months exists alongside the fact that the national unemployment rate is still at 9.7 percent.
“This is more than a one-month wonder,” said Stuart Hoffman, chief economist at PNC Financial in Pittsburgh. “This is telling us that consumers, who had been tightening their belts throughout the recession, have now loosened them a notch.”
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