Despite the multiple signs that a recession looms over the nation's economy, Laredo officials are finding it encouraging that the Gateway City appears to be bucking that trend. Jorge Cedillo, president for San Antonio National Bank's Laredo market, told the Kiwanis last week that Laredo's location along the I-35 corridor makes it less susceptible to the effects on an economic downturn.

And Keith Phillips, senior economist and policy advisor with the Federal Reserve Bank of Dallas in San Antonio, recently projected that Laredo's labor force would grow by 4 percent in 2008, up from 3.8 percent last year.

"Laredo will continue to do what it does, which is show pretty strong job growth," said Phillips, who predicted the area would add 3,600 new jobs this year, up from the 3,330 added last year.

In December 2006, the agency's seasonally adjusted, rounded figures show Laredo had 86,700 people employed. In December 2007, the figure was 90,000.

Cedillo gave several reasons for the positive outlook on the Laredo economy.

"Historically (along) the I-35 corridor, anytime a recession has hit Texas, anytime somebody had a business on the I-35 corridor, they had a better resistance to the recession," Cedillo said at the Tuesday meeting of the Laredo Kiwanis.

Cedillo cited the city's trade industry and Texas' relationship with Mexico as just two of several factors that bode well for the Gateway City's economy.

"Texas is ranked 17th in the world as far as economy (and) trade numbers are still relatively steady," he said. "There have been some drops but they're still in the same ballpark.

"We have the oil and gas industry. Webb County is one of the largest producers in the U.S. and the largest producer in the Texas. We have Mexico which is doing fairly well, there is no problem with the Mexican economy, as far as we can tell, especially when they are depending on the oil market."

Cedillo also said the cost of living in Laredo is still somewhat low in comparison to other cities and cited Laredo's younger labor force, which he said is always an attractive option for businesses, as a plus. He said the pleasant South Texas climate, which is often overlooked, as another positive factor for businesses in Laredo.

Statistics also show Texas is in a favorable position compared with most of the country.

The national unemployment rate is currently 5.5 percent but Texas is holding steady at 4.2 percent, according to the latest figures. Michigan is at the high end with an unemployment rate of 7.4 percent, and Idaho boasts the nation's lowest at 2.7 percent.

Laredo's unemployment rate is 5.3 percent.

Despite the local and regional economic forecast, Cedillo warned that as a nation all signs pointed toward a downturn. He cited the backslide in the national housing and automotive markets, a slow-down in job creation, record gas prices and a credit crunch as the major factors. Cedillo said two consecutive quarters of negative growth signal the official start of a recession, and said the U.S. saw its second consecutive month of job losses after 63,000 payroll jobs were cut last month.

The United States is currently witnessing the weakest growth pattern in five years, Cedillo added.

"I looked at the growth for our Growth Domestic Product, and we are at 1.5 percent for this year, with a possible growth by 2009 to maybe 3 percent as compared to 2.2 percent in 2007," he said.

As far as Laredo and its unique situation, Cedillo cautioned that there is one thing that must remain steady in order for the local economy not to collapse.

"The most important thing, and I lived it the 1980s, is peso devaluation," he said. "That would be a thing that would really put a crunch on our local economy. As long as Mexico maintains its economic stability, we're OK."

Economist Phillips agreed.

If the peso remains strong, as expected, he believes private sector employment in Laredo will improve during the second half of the year because of increased trade with Mexico as well as growth in the health care industry. Phillips' forecast calls for private sector employment to slow "some" during the first six months, particularly in construction, but then he sees it picking up.

Phillips also expected job growth to return to the public sector after no growth last year.

"It's not likely that public employment will stay flat (in 2008) especially with a growing local population that needs services," Phillips said. "Another source of increased government employment during 2008 is the expected addition of more Border Patrol agents stationed in Laredo."

For his part, Roger Creery, executive director of Laredo Development Foundation, touted the good news.

"The bottom line is we're expected to grow at a great pace - running against the state and national tide," Creery said.

(Scott Schaffer contributed to this report. Julian Aguilar may be reached at 728-2557 or by e-mail at jaguilar@lmtonline.com)