Funding Board Meeting

The state funding board held a joint meeting with the business tax study committee today. Lee Jones of the Federal Reserve of Atlanta reported on economic indicators. The economy is expected to strenghthen in the coming year, but growth will likely not be robust enough to significantly reduce unemployment. Even the most optimistic projections expect unemployment to remain above 8.5% through the end of 2011. The good news is that the possibility of a double dip recession appears much less likely. Retail sales have bounced back surprisingly strong since the end of the recession. The most recent results indicate that Tennessee is in recovery and has moved ahead of other southeastern states and the U.S. in personal income growth. Business investment remains robust. Inflation remains at very low levels, but the risk of deflation has declined.