Featuring Dr. Terry Clower
Center for Regional Analysis
Schar School of Policy and Government
George Mason University
Dr. Terry Clower presented an inaugural Mid-Year Economic Outlook as a follow up to his Annual Economic Outlook, which takes place in January and has been sponsored by Matthews, Carter & Boyce for the past eight years. With so much economic uncertainty in 2022, and a rapidly-changing economic landscape, MCB leadership and Dr. Clower felt a mid-year update would be of great interest to our clients, partners and community. On May 25th, Dr. Clower once again shared his insights and addressed all the important economic news of the day.
Always engaging and informative, Dr. Clower did not disappoint.
He began with talk of the economic recovery. Though we experienced a huge downturn in the economy due to the shutdown, we have seen rapid recovery of much loss, though not all. Total USGDP is higher now, but we are still below where we would have been after a long-term span of continued steady growth. “The economy is not as weak as you might think,” he shared.
He then moved on to discuss job growth, stating that though we have not quite recovered to pre-pandemic levels, we have had solid growth. In fact, growth has been higher than most analysts expected. In the first quarter of 2022, the US economy created 1.6 million jobs and unemployment continues to drop. “That’s very good news,” he said.
Pointing to the job trend of retired people coming back to work part time, he said: “I’m a big proponent of this.” He spoke to the advantages of these individuals re-entering the workforce for our communities who can benefit from the skills and expertise of these workers, as they also help to bring production levels up, in addition to the benefits for the workers themselves.
Dr. Clower also addressed the “exploding phenomenon” of remote work. Before COVID, approximately 4% of the national workforce was considered remote; today it is 18% and rising.
The economic landscape may very well change the way industries conduct business in the future. In the automotive industry, for example, Ford and GM are noting that having little inventory has benefits; they are not producing cars to simply sit on lots for long periods of time. “It may be we are readjusting how these inventory factors are contributing to GDP,” Dr. Clower added.
Changes are also happening across the hospitality sector, as restaurants are changing the way they do business to require fewer employees moving forward.
Dr. Clower also addressed consumer confidence and rising gas, construction and food prices, as well as effects of the war in Ukraine. “We are not done with the cycle of rising prices,” he cautioned. “As underlying pressures are continuing – at least through summer, I don’t see inflation slowing down at the moment.”
On the positive front, incomes are rising, more people have jobs, and Americans are paying off our debt and saving, as well as spending.
Personal consumption expenditures are up, and though exports are down a bit they look to be increasing, and imports are increasing because we are buying more goods. High end goods, in particular, are doing very well.
In closing, Dr. Clower commented: “The fundamentals are still pretty positive.” He added, “I still see growth for the year, just not as strong as we were looking at the beginning of the year.”
To view Dr. Clower’s presentation, click here
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