Economic Snapshot 
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    Community and regional banks, the stalwarts of small business lending, are still struggling with deteriorating loans and face a significant challenge over the next few years as more than $1.4 trillion of commercial real estate loans come up for refinancing. Most of these loans were made during the credit bubble, when property values were 40% higher on average than today. Community and regional banks hold 40%-50% of the loans coming due for refinancing.

  • Inflation is expected to stay subdued at current levels—about 1% annually—over the next six months.

  • The job picture will remain fairly soft over the next 12 to 18 months. Nationally, unemployment may decline from 9.7% today to 8% by the end of 2011. The lackluster recovery in jobs is reminiscent of the “jobless recovery” of the early 1990s.

  • The economic recovery will continue to be frustrating and uneven, causing business leaders to keep their expectations in check. Historically, recovery from a credit crisis such as occurred in 2008 is long and drawn-out, as was the case in the 1930s.

This brief national economic snapshot is based on information provided by John Beuerlein, chief economist, Marquette Asset Management.

 
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