LUBBOCK, TX (KCBD) - A recent MSNBC report said Lubbock's economy is in recovery, but local experts say they aren't so sure. The numbers from the latest Lubbock Economic Index show mixed signs with some positive indicators, but ultimately not enough for Lubbock National Bank to claim we're in recovery.
"Good news, Lubbock remains the lowest unemployment in the state of Texas at 5.4%. However, that's a 14 year high for Lubbock," said James Arnold, Executive Vice President at Lubbock National Bank.
A comparatively low unemployment rate is just 1 of the positive factors on the Lubbock Economic Index for October. Other positive factors include an increase in airline boarding's and construction permits, which declined the last 16 months. Home sales also increased about 25% compared to October 2008.
However, these positive indicators are not enough to convince Arnold the recession is over because retail sales declined about 3.9 % from October 2008.
"We need people to put money into the economy. Retail sales, consumer spending are about 2/3s of the local economy," said Arnold. He thinks holiday spending will indicate where the economy is headed.
"It obviously didn't turn around in October. November is usually not a good month to begin a recovery. I think it'll be interesting to see what the holiday season brings in terms of consumer spending," said Arnold.
Beth Bridges with the South Plains Mall says retailers expect sales to be flat compared to last year, but stores are cutting back inventory so their profit margins should improve.
"It's not going to be a huge year, but that's exactly what retailers are prepared for," said Bridges.
Arnold said in July he was optimistic it might be the end of the downward cycle, but months later the economy is still fragile.
"I think I would push that recovery in Lubbock probably into 2010. I'd probably push it into maybe the 2nd quarter before we start seeing some traction in this economy."
Overall the Lubbock Economic Index was down 6.9 % for the month of October compared to last year, meaning the economy declined for the 13th consecutive month.
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