Good Thursday evening.
So every single day we hear
how bad the economy is going.
Ohh it might be getting better.
Oh it's still really bad.
More layoffs, higher prices on just
about everything for quite some time.
But today, news in the good column.
President Biden spoke in
Virginia about the economy in his
opinion is showing improvement,
up nearly 3% in the fourth
quarter of last year.
We're on the right track.
Roads and bridges are being built.
Factories are coming along.
People are back to work.
Families are breathing just
a little bit easier. Well,
Republicans would disagree.
They believe that Biden and the
Democratic Party are responsible for
inflation remaining still quite high.
So how do we sort through all of
that as regular people and try to
figure out what's really happening
and where it might be going?
We asked Ken to do it pretty
much on a weekly basis,
and so we asked him again today.
Hey, Kent.
Hi, Janet. Yeah, thanks for that,
by the way. If I'm being honest,
I have resorted to wearing my
glasses in an attempt to at least.
Look smarter. Because after taking
a close look at the GDP report,
which we're talking about today,
which shows a growing but slowing economy,
and talking to experts who describe a
growing but slowing economy, predicting
where we go
from here is more
confusing than ever.
If you're struggling to understand where
in the world our economy is going, it's OK.
So are the experts.
There was a almost a parody of a
survey of economists that that happened
a couple of weeks ago that said,
52% of economists think that there's
better than a 5050 chance of there
being a recession in 20230. Come on.
So let me get this straight,
50% of economists think there's a
5050 chance of going into recession.
That was two weeks ago.
So I think that that number will
have changed.
Less than 50% would now think that we
were going into a recession in 2023.
So there's your good news.
All I hear is a coin flip.
That's a fair way to put it.
And I don't think this report
necessarily changed it from a coin flip.
Tyler
Schipper is an economist and a professor
at Saint Thomas and says on one hand,
our GDP did flip from negative for
the first two quarters of last year
to two straight quarters of growth.
But he says it's also important to note that
the growth has slowed from 3.2 to 2.9%.
Good news here is this.
Was the economy being resilient
in the second-half of 2022?
I think that's kind of an important story,
that things will be tougher
in 2023 but maybe not drastic.
Like we've come to think about
recessions like a financial
crisis or a pandemic recession.
This economy is solid.
Chris Farrell, senior Economics
contributor for NPR News and Marketplace,
says despite a real housing
recession right now and recent
headlines about tech layoffs,
overall jobs and spending are
holding steady while inflation.
Keeps inching down.
So in other words,
we're telling a story about an
economy that's slowing down.
The consumer is getting
a little more cautious.
In the GDP report,
there is evidence that businesses are
investing at a more cautious pace.
But economists have a terrible track
record at forecasting recessions.
It's absolutely awful.
So they have good reasons why they're saying
we will probably have a recession in 2023.
But again, we keep getting reports that.
Say. Well.
Not yet. Which
brings us back to this economist.
Yes, we're wrong. We're wrong a lot.
I'd be the first person to tell you that.
Would you rather be wrong to the positive
side than wrong to the negative side?
There's a good argument here
for I'd rather be the optimist.
If you have pundits out there saying,
you know, things are looking good,
people behave like they look good,
things end up being good.
On the other hand,
if everybody's really being pessimistic,
and that starts to.
Trickle into consumer sentiment.
It's a self fulfilling
prophecy at that point. And
Speaking of that positivity,
going back to that 5050 recession forecast,
while it certainly doesn't
tell us much right now,
if you look back at October,
2/3 of economists predicted at
that time that we were heading
for a recession in their opinion.
So there does seem to be some growing
positivity and I will settle for that. It
must be the glasses.
But what Tyler was saying
at the end there is true.
And I know you've been
told this from economists.
That what we think is happening
actually turns out to be what is
happening in terms of how we spend,
right, Kent, that psychological part
it, it is. There's a lot of
psychological aspect to it.
And if all of us are worried
that the sky is going to fall,
we're going to behave differently.
So we have to be realistic, but we also.
Gotta balance that positive and negative.
I thought you were gonna say if we
all think this guy's gonna fall,
this guy is gonna fall.
Which will behave like it is just got. OK,
thanks so much Kent.