Q4 2010: Puerto Rico’s Recovery is Past Due

The fourth quarter of 2010 unveiled mixed results. Auto sales and housing sales improved, while other indicators, especially the labor market and the construction sector, pointed to continued recession. There are doubts regarding the strength of consumer behavior during Q4 since Xmas purchases were financed in part with the withholding personal income tax in December that Treasury did not collect. It is not clear yet how the Tax Reform will generate new economic activity and create new jobs. The frequently announced initiative of Public Private Partnerships that would generate investment and jumpstart the economy has not started. According to NBER, the US recession started in December 2007 and ended in June 2009 whereas our “criollo” recovery is still in the distant horizon. For many, a local economic recovery is long overdue.