The President warns that the economy will be unbalanced and anticipates a “year of growth” | News
Economist Dr. Anirban Basu expects a year of economic growth in 2022.
Basu, president and CEO of Baltimore-based Sage Policy Group, was the keynote speaker at the Susquehanna Region Valley Chamber of Commerce’s 14th Annual Economic Forecast via Zoom via Zoom. The meeting brought together nearly 200 participants.
Consumers continue to spend and supply chain issues appear to be improving, Basu said.
“I would expect this to be a year of economic growth,” Basu said. “It will be a year of growth, but it will not be rapid growth. In the 2% range, I think that’s where we will see growth this year. The economy will remain a bit unbalanced, suppliers struggling to keep pace with the demands Things are looking up on the supply side.
Sage Policy Group is an economic and policy consulting firm in Baltimore. In 2014, Maryland Governor Larry Hogan appointed Basu as chair of the Maryland Economic Development Commission. Anirban is also Chief Economist for Associated Builders and Contractors and Chief Economic Advisor for the Construction Financial Management Association.
Along with rising wages amid the Great Resignation which results in higher than average inflation across the economy in 2022, he said he expects inflation to pick up. is around 4 to 5% by the end of the year.
Basu warned of a rapid decline in commodity and asset prices, but he expects “the pendulum will swing back” and see relief in some of the prices, he said.
The Pennsylvania State Department of Labor and Industry reported Friday that the state’s unemployment rate fell to 5.4% in January, the lowest since March 2020. The total number of jobs non-farm increased by 20,000 during the month.
The January report marks the 21st straight month with no increase in the unemployment rate. Meanwhile, the unemployment rate in the United States rose by a tenth of a percentage point to 4.0% in January. The Commonwealth’s unemployment rate was 2.1 percentage points lower than its January 2021 level and the national rate fell 2.4 points on the year, according to the state.
The most recent data, Basu said, indicates that there were 11.3 million open and unfilled jobs in America in January. The American labor force is not as large as it was before the pandemic, he said.
Vaccinations and the return of children to school, as well as inflation — things cost more — are factors pushing workers back to work, Basu said.
“It’s getting harder and harder to pay the bills,” Basu said. “The stimulus payments they received during the pandemic are in the rearview mirror. Inflation is driving up the costs of fuel, food, rent, etc. I suspect more Americans will join the workforce in the months coming because they have bills to pay, and it’s getting harder and harder to pay them.”
Between February 2020 and February 2022, America lost 2.1 million jobs. Leisure and hospitality lost 1.5 million, but professional and business services added 596,000 and trade/transportation/utilities 567,000, Basu said.
“The economy is an egg and we broke it,” Basu said. “It was less broken in some areas… It was hard to put that egg back together. It was hard to put it back together.”
The unemployment rate is low in December for the Valley: 2.7% in Montour County, 3.1% in Union County, 3.4% in Snyder County and 4.6% in of Northumberland. But, Basu said, employment is also down: 1.9 in Montour County, 2.4% in Snyder, 4.5 in Northumberland County and 5.1 in Union County.
“It’s a reflection that the workforce has shrunk,” Basu said. “One of the big hopes is that people will get back into the workforce and that will be a way for us to pursue a longer and faster period of growth in the future.”
Bob Garrett, president and CEO of the Greater Susquehanan Valley Chamber of Commerce, praised Basu for his presentation.
“Once again, Dr. Basu has provided House members with a message filled with facts and figures,” Garrett said. “Free from political distractions, his presentation laid the groundwork for local businesses to do their part in rebuilding our local economy which has been reeling from a two-year pandemic, high inflation and labor shortages. He told us there are many while endorsing the House’s multi-year efforts to recruit and retain skilled workers for local jobs, he also outlined several strategies to deal with the immediate issues of inflation and to binding regulations.