Local economists are predicting a continued gradual recovery from the worst recession since the Great Depression.

Local economists are predicting a continued gradual recovery from the worst recession since the Great Depression.

Columbus Chamber of Commerce economic analyst Bill LaFayette predicted continued growth in both the national and regional economies during a 30-minute presentation at the Columbus Athletic Club Friday morning.

LaFayette's 12th annual Columbus Blue Chip Economic Forecast included a review of the events of 2010, a discussion of trends that are likely to impact the region in 2011 and an employment forecast for the Columbus region's key industry sectors.

"It wasn't all that long ago that we were all braced with our heads down in crash position," LaFayette said. "While I have to tell you that the news is not exactly good yet, it is indeed better. The U.S. economy has been in recovery since a year ago, summer. We now have five completed quarters of growth in Gross Domestic Product (GDP), which is the total value of everything produced in the U.S."

LaFayette noted that while the recession cut the GDP by approximately 4.1-percent, the economy has already added back 3.5-percent, or half a trillion dollars of gain after inflation, since the second quarter of 2009.

"If the forecasts are right, next quarter's GDP should erase the last of that loss and the GDP should be setting new record highs again," he said. "But the GDP is going to be a whole lot less than it would have been had we not been through the biggest recession since the Great Depression."

However, LaFayette said a closer look at the most recent GDP figures are less encouraging.

"The bad news is that GDP growth is much slower now than it was earlier in the year," he said. "The fourth quarter of 2009 gave us a 5-percent increase on an annualized basis, which was one of the largest quarterly increases in GDP of the decade. This year's first quarter was a still respectful 3.7-percent. The second quarterwas a miniscule 1.7-percent and the third quarter was really not much better at 2-percent."

LaFayette noted that there is a silver lining within those gloomy statistics.

"The good news is that if you dig below the surface of those somewhat depressing numbers, you find really good news," he said. "Most of the strong growth that we were seeing last year was stimulus. Most of the recent growth has been driven by consumer spending and business investment."

On the employment front, LaFayette said employment actually bottomed out in December 2009 and has been increasing in 2010.

"Unless things turn out to be a whole lot worse than what we were expecting in 2010, that December 2009 number is going to be the bottom of employment," he said. "The really remarkable thing about this is the employment turned only six months after the economy turned."

LaFayette said an estimated 8.4-million jobs were lost during the recession and it could take years before a substantial number of those jobs come back.

"Even if we get the kind of job growth that we saw in the 1990s, we will be adding only about 3-million jobs a year," he said. "So it's going to take at least several more years to dig ourselves out of the hole that we dug ourselves into."

LaFayette's presentation was a preliminary glance at his annual report, which will be released Jan. 5 at the Columbus Metropolitan Club luncheon.