FAIRMONT — At a Bureau 14 meeting Wednesday night, Ethan Hellier of the US Chamber of Commerce provided an update on the economy, political dynamics in Washington and likely outcomes of Congress.
Bureau 14 is an assembly of members of the Fairmont Area Chamber of Commerce. It takes place on the second Wednesday of the month at a different location in the city. Wednesday’s meeting took place at The Ranch Restaurant.
Hellier began by saying that people may have heard that a mild recession could be on the way. He said experts say there is about 65 percent of a mild recession.
“However, according to our chamber colleagues, recent strength in spending and the strong labor market could boost this and we could see an even milder recession or no recession at all.” said Heller.
The issue of inflation was also raised. Hellier said it peaked at just over 9 percent but has now dropped to 6.4 percent. Something that plays into inflation is wage growth. While many people’s wages have risen, inflation is eating away at it.
“As wages go up, so does more money out of pocket.” said Heller.
Several common costs were shared. Hellier said power was up 12 percent year-on-year, gas was up about 1.5 percent and groceries were up 11.3 percent.
“And housing, which is the biggest driver in this state in particular, is up 7.9 percent. While that seems very high, national housing construction has long exceeded 20 percent. Housing is a big driver of our elevated inflation,” said Heller.
He said it’s likely the scale will level out, noting that the Federal Reserve wants to see inflation hit 2 percent and that some economists say that could be achieved in 2024.
Manual transmission, the labor gap was also discussed. Hellier said there were 6 million unemployed and just over 11 million vacancies, leaving a gap of 5.3 million jobs.
“Low unemployment is a plus, but it goes so far that companies are so low they can’t find workers.” said Hellier.
He said the labor force is larger now than it was pre-Covid, but if it were equal to the labor force participation rate in February 2020, there would be about 3 million more people working pre-Covid.
“There are more people in the workforce but with the work rate the number is still much lower. There are a lot of people who stay on the sidelines.” said Hellier.
It was asked why people stay on the sidelines. Hellier said there were a number of reasons, including childcare. He said many more women started staying at home as families reviewed their budgets and figured out how to live on a salary. It’s also likely that many people approaching retirement age retired earlier than expected.
Hellier said immigration also slowed during the height of the Covid-19 pandemic, which could be contributing to the shortage.
In terms of current political dynamics, Helllier said that from 1960 to 1998, seven of the 20 elections resulted in a change of House, Senate, or White House. Since 2000, 10 of the 12 have resulted in a change.
“Every president since Clinton has started his first term with unified control of Congress. Now we have seen five consecutive cycles that have produced change and this is the first
“It hasn’t been long since 1962 since a Democratic president won Senate seats,” Hellier said.
He said the big takeaway from this is that it’s easy to predict what will happen in the upcoming election and it’s important to have friends on both sides of the aisle.
The Senate went from 50/50 to 51/49 with Democrats winning a seat in Pennsylvania. The House, on the other hand, has 222 seats to 213 seats, with the GOP gaining 10 seats. On the state side, Hellier said Democrats won four seats in lawmakers and two governorships across the country.
“Looking at the exit polls, I think the conventional wisdom is that inflation and crime would be the top issues in the minds of voters, which inflation was. The interesting thing is that crime took third place and the Roe vs. Wade result on abortion took second place.” said Hellier.
How people said they voted on abortion, the switch from 2020 to 2022 was that the GOP went from 89 percent in 2020 to 19 percent in 2022. Nine percent of Democrats in 2020 said the issue was important, which rose to 77 percent by 2022.
Hellier shared that the only thing that needs to be done is that there is a deadline addressing the debt ceiling. He said while many counties have eliminated their limit, the US hit theirs on Jan. 19.
“The debt ceiling thing… we were close to hitting it in 2011. We were so close to reaching them that the markets freaked out. The stock market fell, the dollar suffered.” said Hellier.
He said if the debt ceiling were to result in a default, the Treasury said it could have catastrophic effects not only on financial markets but also on job creation, consumer spending and growth. Many private sector analysts believe this could lead to events on the scale of late 2008 or worse.
“They don’t take it lightly. It’s something we must do. I think you will see spending cuts on the table to get that done.” said Hellier.
Finally, he touched on some other things the Chamber is working on, including immigration reform through border security. Unfortunately it doesn’t have a deadline and with Congress working on deadlines it may take a while to complete.
Another thing being worked on is allowing reforms that are more bipartisan motivated to meet in the middle.
“We conducted a study that found that the average project took four to seven years to go through the permitting process, which typically takes much longer than the average project itself.” said Hellier.
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