Down Angle Symbol A symbol in the form of an angle pointing downwards. Belinda Román has summed up her growth and unemployment forecasts for 2023. St. Mary's University
- Belinda Roman teaches economics at a little-known university in San Antonio, Texas.
- She made her predictions for 2023 succinct, at a time when much of Wall Street was predicting a recession.
- Román told BI that she is still optimistic about the economy – but is keeping an eye on the 2024 elections.
At the start of 2023, most US economists were bracing for a recession.
They predicted that a combination of red-hot inflation and soaring interest rates would slow growth and drive up unemployment.
An economics professor at St. Mary's University, a small Roman Catholic college in San Antonio, Texas, bucked the trend.
Last January, Belinda Román told Wall Street Journal reviewers that she expected strong economic growth in 2023. In the end she proved this statement to be true.
Román spoke to Business Insider about why she's more optimistic about the American economy than most of Wall Street's top banks – and shared her predictions for 2024.
No recession, low unemployment
In January 2023, Román announced her forecast for the year, telling the WSJ that she expected the U.S. gross domestic product (GDP) to grow by 2.8%.
That was a significantly higher number than most of the country's economists predicted. Both Bank of America and JPMorgan had warned that it was time to prepare for a recession – typically defined as two consecutive quarters of economic contraction – while even some of Wall Street's most optimistic voices were still predicting a slowdown.
Since then, Roman has been proven right. The Commerce Department estimates that GDP rose 3.1% last year thanks to cooling inflation and robust consumer spending. This is evident in Americans' willingness to spend a lot of money on travel, live sports and Taylor Swift concerts.
“I went back and looked at what I think is typical of the U.S. economy when it comes out of a shock and tried to recalibrate my thinking,” said Román, who has been at the U.S. for 13 years St. Mary's teaches, told BI in a recent interview.
“Covid-19 has been significant, but the duration has not been as long-term as some other events we have experienced. That’s why I started adjusting my numbers,” she added.
“I didn’t really go back and tinker with my prediction – I just kept going based on what I thought the outcome would be.”
Román also nailed down her inflation, unemployment and interest rate forecasts for early 2023. That meant she topped the Journal's rankings of 71 forecasters last year, finishing ahead of well-known economists like Jan Hatzius of Goldman Sachs.
She told BI that her long and varied path to teaching — starting as a medical student before stints in the House of Representatives and at the American Chamber of Commerce in London — helped her look at the U.S. economy in a different light.
“I returned to academia only after completing all my work in the private and NGO sectors. That’s why I brought this experience and I think that helps me when I make these kinds of predictions,” Román said.
Predictions for 2024
Many forecasters are now optimistic about the US economy in anticipation of a bright 2023 – and Román is no exception.
She told BI that she expects growth to slow slightly to about 2.6%, but far from a level at which Americans will have to worry about a possible recession.
“There is still growth and some positive momentum, but there is also a sense of slowdown,” Román said.
The job market has gotten stronger in recent months, but inflation remains stubbornly above the Federal Reserve's 2 percent target and some on Wall Street warn that growth could finally slow this year.
The 2024 presidential election in November is a potential speed bump that makes it harder to predict which direction the economy will go this year, Román added.
“The political environment is challenging because it is very rhetorically charged,” she told BI.
“I think fundamentally, if the change in the presidency leads to significant changes at the lower levels, then we could see a significant change in economic activity.”
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