With a virtual audience of almost 170 registrants, MCB’s annual economic outlook with Dr. Terry Clower once again proved to be an educational, insightful and thought-provoking afternoon.
Dr. Clower launched his presentation covering national economic trends, beginning with his U.S. Gross Domestic Product analysis, speaking to the fact that economic growth has continued as we have been in post-pandemic “recovery” and articulating that we’ve just about come back to the trend line. In the past few quarters, the rate of growth has continued to accelerate, which has been a surprise to many, including Dr. Clower himself.
Dr. Clower also spoke expansively about the fact that the job market continues to pleasantly surprise people with its growth. The overall good news at this time is that the job market has been very resilient. He shared this insight: “I’ve taken recession off my forecast for 2024.”
Also related to employment, Dr. Clower pointed to high child care costs as a “national economic issue,” something he has consistently raised in previous Economic Outlook events. He stressed that with more women coming back into the workforce, the fact that child care and elder care costs are high is a continuing concern.
With respect to wages, though there has been growth, when you adjust for inflation there has been a negative impact on what people have in their bank account at the end of the month, which is why many consumers are worried. There are stresses; prices are still comparatively high to what they were four years ago, though we are getting “closer to having more normal levels of inflation.”
With respect to interest rates, he does feel they will come down some, perhaps later in the year. Thirty-year mortgages are now hovering around 7 percent; he thinks they will moderate but not fall below 6 ¼ percent, and will stay relatively elevated. This is more along historic norms (6 percent would have been considered an expected rate historically). He stressed that today’s home buyers need to be realistic; if they are expecting they can buy now and later refinance to 3 or 4 percent – those days are gone for the foreseeable future.
With respect to the overall US 2024 outlook: Dr. Clower pointed to bank failures as a regulatory oversight issue — banks were operating irresponsibly. This will negatively impact business expansion because banks won’t be lending as robustly.
Dr. Clower then transitioned his presentation to trends here in the Washington, DC metro area. He began by calling attention to some real challenges that “we as business people and business leaders need to be concerned about.” He spoke about the fact that our region is trailing behind national economic performance metrics. “If we do nothing,” he cautioned, “we will be on a path…towards economic mediocrity.”
Stressing the necessity of a call to action, he added: “The Washington region was great, it can be greater.”
The same week as our virtual event was held, The Washington Business Journal published an article written by Dr. Clower, “The D.C. Region’s Choice: Economic Competitiveness or Perpetual Mediocrity?” In it, he and his colleague Jonathan Aberman describe their concerns that “Our region has been trailing national economic performance for an extended period of time.” The article is a call to action for an “all hands on deck” approach to ensure we diagnose the challenges and design solutions to reverse our region’s downward trend. To read the article click here: https://mcb.cpa/dr-terry-clower-published-in-washington-business-journal-the-d-c-regions-choice-economic-competitiveness-or-perpetual-mediocrity/
Always interested in audience insights, Dr. Clower fielded a variety of questions at the end of his presentation. To view the presentation in its entirety, click here.
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