Let the good times roll! Economist predicts boom not seen since 1990s.

New York City is in for an economic boom comparable to the good times of the late 1990s, according to Marc M. Goloven, senior regional economist of JP Morgan Chase.

Goloven, who was the Association of Real Estate Women's guest speaker last week at the Harvard Club, said the statistics strongly show that New York City is in a recovery. In the 3rd quarter of 2003, the national economy expanded by 8.2 percent, after adjusted by inflation and expressed at an annual rate. The 4th quarter also saw a increase at a rate 4%.

"If we combine the two, we have an average growth in the second half of last year of 6.1%," said Goloven, who was brought back by popular demand for his animated and colorful speaking style "When you hear a growth rate of 6%, that's growth rate that comfortably exceeds the torrid expansion of the economy in the halcyon days of the late 1990s boom."

Goloven expects the economy in 2004 to expand by 4 to 4.5%, which is a rate that exceeds the recovery experienced in the late 1990s.

"Between the years 1996 through the year 2003 when we could not find any dark clouds on that economic horizon, the expansion of this economy averaged 4.25% each quarter," he said. "The days of the 1990 boom there was hardly a cloud on the economic horizon, unemployment was falling to a postwar low, interests rates were diving lower, and inflation was vanquished as a problem in the economic landscape."

Similar circumstances exist today, but there are a few dark clouds.

"One of the major retardants, not only to your business, but to the economy as we look forward, has been this so-called jobless recovery," said Goloven. "It's often pointed out, notwithstanding all of this growth, jobs do not seem abundant. The labor market outlook still remains generally glum."

Nationally, nearly 3 million jobs have been lost over the last 3 years. However, 2.8 million of those jobs have been in manufacturing, which did not impact New York City as much as it did the rest of the country, according to Goloven. "Because downstate New York lost its manufacturing facilities a number of years ago, including NYC, the strong pace of manufacturing job losses has really not affected us to any significant extent," he said.

Unemployment rates could decrease should the economy continue its expansion, he said.

"Only if the growth rate in this economy does indeed hover in the neighborhood of 4.5 or even more at 5% will there be a significant need to start adding workers once again," he said.

But the good news is that even without new jobs, the economic recovery is here, and New York City will parallel the national economic recovery, he said

"After generally three lean years in the New York City economy, it does appear that our protractive economic slide has come to an end and that we are now poised for a recovery in the year 2004," he said.

"It is going to accompanied by very little inflation; exceptionally low interest rates and a striking surge in productivity." The productivity comes at the cost of less workers working harder and longer hours, who are toiling daily for less money.

"We have experienced a remarkable surge of productivity or output per hour," he explained. "The American workforce seems to be toiling more intensively then ever before.

"Whether it is due to fear they can be laid off at any given moment or whether it is due to mean spirited employers, for whatever reason, while the economy's output has been expanding at a rate unseen for the past 20 year, so too has productivity."

Areas that will continue to lag behind in the recovery are investment spending and the equities market, as well as the building of new of office towers, retail distribution centers and hotels.

"Spending on those structures remains weak and will likely remain so until we start to see a significant increase in the job base," he said.