UGA economist: Economic projections points to ‘soft landing’

ALBANY – If there is one thing most economists could agree on this time last year, it was that the U.S. economy was heading toward a recession.

A strong labor market held the economic downturn at bay, and although hiring is not expected to be as heavy this year, job growth should keep the economy on a positive footing, although not as strong as last year.

That was the assessment delivered in Albany on Thursday by Ben Ayers, dean of the University of Georgia’s Terry College of Business during an annual economic outlook session held at Albany State University’s West Campus.

“Job growth will continue this year, but we expect it to slow,” he said. “We do expect unemployment to pick up this year, but not too much.

“We do expect this year employers will hold onto employees more tightly than in previous years. The positive side there is we expect there to be less room for wage-increase inflation.”

If those projections hold true, there is a good likelihood of achieving the proverbial “soft landing” where the U.S. Federal Reserve Board’s interest rate hikes will ease inflation but not tip the country into a recession.

Ayers put the odds of a national recession for the year at less than 50%. For Georgia, the chance of a recession is about one in three.

Some of the factors baked into that assessment are the strong financial positions of households, less inflation, improved and more secure supply chains and government spending.

“Many households have locked into lower-rate mortgages” giving them more money for discretionary spending, Ayers said. “Consumer spending is not expected to decrease this year, at least not by very much.

“A major reason we are hopeful about prospects this year is lower inflation. Inflation was cut in half without triggering a recession, and that is good news.”

For the state, the economist pointed to higher vehicle sales, the end of the writer’s strike that will allow film production to resume, Georgia’s large cyber security industry, more consulting firms and business-service providers, and the state’s large representation with corporate headquarters as reasons to be optimistic.

As is the case with any economic forecast, Ayers pointed to some potential clouds on the horizon. A large and sustained increase in oil prices could drag the country into a recession, as could a bad move by the Fed, a financial or banking crisis, collapse in stock or home values or broader military conflicts.

The report sounded positive for Dougherty County, said Barbara Rivera Holmes, president and CEO of the Albany Area Chamber of Commerce.

“We’re going to see job growth; we’re going to see business investment; we’re going to continue to see a strong housing market,” she said.

Staff Photo: Alan MauldinAlanMauldin[email protected]
Staff Photo: Alan MauldinAlanMauldin[email protected]