Officially, the Great Recession ended in June 2009.
However, many of its effects still reverberate – and will likely continue to do so for some time, said David Oppedahl, an economist from the Federal Reserve Bank of Chicago.
Oppedahl spoke to area residents Thursday during a presentation kicking off Money Smart Week in Fort Dodge.
According to Oppedahl, the present economic situation does offer some positives for small businesses and budding entrepreneurs.
In particular, low interest rates for loans can make financing startups or expansions easier, he said.
Oppedahl cautioned, however, that loans can be more difficult to obtain, as many banks have tightened their requirements in terms of collateral and credit ratings.
“Prior to the recession, there were loans made that probably shouldn’t have been,” said Oppedahl, referring to the so-called housing bubble which fueled the economic downturn. “Now, things may have gone a bit too far the other way.”
Oppedahl is a business economist in the economic research department at the bank. He conducts research on the agricultural sector and rural development as well as conducting microeconomic research and directs the Chicago Federal Reserve District’s survey of agricultural banks on agricultural land values and credit conditions.
Skyrocketing crop prices and land values will continue to have a positive effect on the region, said Oppedahl.
Though there are some similarities to the housing market prior to 2008, Oppedahl said that a bursting “ag bubble” is unlikely.
“Farmers still remember the 1980s,” he said, in reference to the farm crisis that saw farm values decline by as much as 60 percent in the first half of that decade.
Oppedahl extolled the virtues of the entrepreneurial spirit among farmers – which, he said, carry over into other aspects of the Midwestern economy.
Though the national economy is in a period of slow recovery, Oppedahl said, certain areas will likely remain tenuous for the foreseeable future.
Between December 2007 and February 2010, the U.S. economy lost 8.7 million jobs, according to Oppedahl.
Since then, 5.8 million jobs have been created.
This has contributed to a decline in the national unemployment rate, which now hovers near 7.8 percent.
A return to pre-2008 levels of unemployment is likely far off, according to Oppedahl.
“It is a long-term process and a challenge,” he said.
The Fed predicts a 2.4 percent growth in the gross domestic product for 2013, with 2.9 percent growth predicted for 2014.
Interest rates, presently at historic lows, will likely remain so through at least 2014, Oppedahl said.
In positive economic news, the U.S. economy has adjusted to higher petroleum costs, while natural gas costs remain low, according to Oppedahl.
Meanwhile, dramatic increases in food prices feared after 2012 drought conditions have not materialized, he said.
Despite modest recovery, uncertainty permeates the U.S. economy, Oppedahl said. Consumer confidence remains well below pre-recession levels, he said.
“The recovery is much slower than after other deep recessions,” he said.
Sponsored by the Federal Reserve Bank of Chicago, Money Smart Week will be observed in 11 Iowa communities in 2013. The purpose of Money Smart Week is to provide financial literacy outreach and help consumers better manage their personal finances.