Feb 10, 2008

El Paso ponders recessionBy Vic KolencElPasoTimes.com

Is the United States headed for a recession, or is it already in one? And how will El Paso’s economy weather the storm?

Several economists around the country last week said the country is already in a recession.

“Recession has arrived, in our view, heralded by intensifying weakness in incoming data, and the economy faces a rocky road ahead,” wrote Richard Berner and David Greenlaw, economists for New York brokerage Morgan Stanley, in a report issued last week.

Oscar Varela, a professor of finance at the University of Texas at El Paso, disagreed.

“A recession is two consecutive quarters of a decline in gross domestic product (GDP). Economists that say it (the nation is in a recession) are not following the traditional definition,” Varela said.

Berner and Greenlaw at Morgan Stanley said they forecast that national economic output, as measured by GDP, would be negative for the first two quarters of this year.

“I personally think we will avoid a recession because I believe the (national) economy is resilient enough to adjust quickly,” Varela said. “El Paso has shown more resiliency than a lot of other parts of the country, and certainly would not be the hardest hit area if we went into a recession.”

Varela and other economic experts in El Paso said that Fort Bliss expansion should help lessen some of the effects of a recession in El Paso if one does occur.

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