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PNC chief economist 'cautiously optimistic' about economic turnaround Date published: 5/14/2009
BY BILL FREEHLING PNC Bank's chief economist is "cautiously optimistic" that the economy will begin to turn around late this year. That was the message delivered by Stuart Hoff-man on Tuesday in a speech to Fredericksburg-area business leaders at the University of Mary Washington's Jepson Alumni Executive Center. "We're still falling but not free-falling," Hoffman said at the lunchtime address. Hoffman, a senior vice president at the Pittsburgh-based bank, said Americans have gotten more confident about the economy. Coupled with the aggressive actions of the federal government, he thinks that should turn the economy around later this year and into 2010. He sees retail sales rising, employment stabilizing and housing hitting bottom after falling another 10 percent or so nationally this year. That should push stocks higher over the long term. Hoffman warned that the economy hasn't turned yet, and he said the recent stock-market rally may be misleading. He said the commercial real estate market is likely to struggle for at least another year. He also noted that if oil prices rise sharply, that could delay the economic recovery. Hoffman thinks the U.S. will lead the world out of recession, and the improved climate will spread to Europe and Asia. He noted that the Washington region is doing better than most. Though he agrees with the economic stimulus and the Federal Reserve's aggressive lowering of interest rates, Hoffman sees inflation risk on the longer-term horizon. He said it's important that the Fed increase interest rates and shrink the money supply when there are signs of an economic turnaround. Overall, Hoffman left the crowd with a mostly upbeat message. "The end of this recession is finally in sight," he said. "It's out there. I can see it. I can almost taste it." Bill Freehling: 540/374-5405
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