Puerto Rico Compass ©

Q4 2010: Puerto Rico’s Recovery is Past Due

What 4th Quarter 2010 economic indices reveal

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.

Puerto Rico Economic Pulse ©

December 2010: Unrealized Great Expectations in 2010

A review of important economic events in Puerto Rico

As calendar year 2010 nears its end, we take a panoramic view of newsworthy economic events in Puerto Rico. The preface of course is what happened in the rest of the world and which also impacted our economy. The insatiable appetite of China’s exports as well as banking everywhere has touched us. At the start of the year, we were all hopeful that selected government policies would start turning the economy. Instead, we have seen the continuation of what could be described as the longest (4 years) and, so far, deepest economic recession in our modern history. In real terms, the economy’s real GDP has shrunk $767 million since 2006 and the labor market lost 176,000 jobs. Unemployment increased to 16% by October 2010. Indeed, 2010 feels as if 12 years instead of 12 months have elapsed. Policies, jobs, and houses have a lot to do with it.