Speaker at economic outlook breakfast upbeat about economy

SYCAMORE - The economy isn't that bad. At least that's the interpretation Jim Glassman, a managing director and senior economist with JP Morgan Chase & Co., shared with DeKalb County business and community leaders during an economic outlook breakfast Tuesday morning at the DeKalb County Farm Bureau building. Glassman - who served on the Federal Reserve Board from 1979-1988 - said that with the exception of a few industries, much of the county's economy is doing well. “We know there are challenges, and the challenges are largely related to the housing index,” he told the 200-plus audience members during his presentation. “For the large part, we are doing fine.” A recession doesn't necessarily describe what's going on right now, he said. In the past, recessions have been preceded by the economy and inflation growing too fast. Companies can't find workers, so the Federal Reserve works to slow the economy down - often going too far and sending the country into a recession, Glassman said. That's not the case now: Inflation is at about 2 percent, and up until last week, only about 350,000 Americans a week were filing unemployment claims, Glassman said. Recession levels occur when claims are between 400,000 and 500,000 - and that just happened last week, he said. There are struggling industries, Glassman stressed, particularly the housing, building and financial markets. The housing bubble allowed home prices to soar too high, he said, and now they are correcting themselves. That has limited demand for new construction and for those homes already built. It also has had an impact on the financial institutions that lend money. And since much of the mainstream media - such as The Wall Street Journal and The New York Times - are located near Wall Street, Glassman said they report what's going on in their backyards. But other industries - such as health care, exporting and agriculture - are doing well, he said. “The global economy is going through its best economy ever since the dinosaurs,” Glassman said. Developing countries are “waking up and going through what we did during the Industrial Revolution,” he said, and the United States enabled that in part because businesses have built factories overseas that employ people, pumping money into those countries' economies. He predicts that businesses will be cautious with their hiring but there will not be many layoffs. Financial systems may need to be overhauled so there is more transparency between lenders and investors. And while the first half of the year may be slow, Glassman sees the economy picking up this summer when rebate checks - part of a federal stimulus package recently approved by Congress - start arriving in mailboxes. The breakfast was sponsored by the DeKalb County Economic Development Corp.