Our program featured local economist Kamran Afshar who provided insights to the state of the US economy through his data-driven methods of analysis. He believes the days of supply side economics are long gone. The US economy is demand driven. It is well known that Americans love to spend. When COV1D came along, our spending world was largely shut down. Many of us received stimulus checks that provided unexpected income. As the world reopened, so did our wallets. Unfortunately, supply chain issues made it impossible for supply to keep up with demand. This is one of the factors that is responsible for the ongoing inflation.
Despite the inflation, retail sales are at historic highs. The restaurants that survived the shutdown are boom ing. Spending is up for sporting goods and hobbies. The federal reserve has countered inflation by raising interest rates from near zero to closer to 5%. Inflation hit a peak in June 2022 but has been slowly dropping. The war in Ukraine will continue to have a negative effect on fuel prices. Here in the Valley we continue to see high prices for gas, rent, and food.
The job market in the US is extremely strong with an average of 6 million hires every month. Layoffs remain down from historical numbers. The employment figures are already higher than pre-COVID. The Valley used to rely heavily on manufacturing for employment. Whole generations were able to live quality lives thanks to Bethlehem Steel. Today the biggest employment is in healthcare. Manufacturing has not gone away. We are manufacturing four times as much as we did in the 1970s, but we are doing it with a quarter of the work force. Transportation and warehousing in the area are doing great. The leisure and hospitality markets have still not fully recovered. Real estate had been booming but is now cooling off. Commercial real estate is suffering as more people work from home.
Recent failures in the banking industry are a cause for concern. The current data does not suggest a recession, but it does indicate an inevitable slowdown. The problem is we are not in a very strong position. A recession could follow if the slowdown is too severe. Kamran offers lots of free economic information at KADAC.net.