September 12, 2019. Our program featured Bethlehem Rotarian Kamran Afshar, a noted economist, consumer researcher, and data analytics expert in the Lehigh Valley and the DeSales University Division of Business. He considers his job to be both a privilege and a disaster. He reminded us that his profession is forecasting, not prophecy. His data-based predictions reflect the most probable outcome based on current data and historical trends.
The United States is still in the midst of a lengthy economic upswing. The growth coming out of the great recession was slow and steady which helped stave off inflation. The current signs do not point to another recession but we are seeing a slow down. The University of Michigan Consumer Sentiment Index dropped 8% in August. Respondents indicated their most important concern was tariffs. Kamran is not in favor of a tariff-based trade war as he sees it a a no-win situation. The winner of such a war simply loses less than the other party. Industrial production has already dropped. Farmers have also been hurt. It can take a long time to reestablish markets. Auto and light truck sales are dropping. Urban consumers often choose public transportation instead. People may soon buy a car subscription instead of a lease. Car-sharing is also a possibility.
Housing prices in the Lehigh Valley continue to rise but they have yet to reach inflation-adjusted prices from 2007. This is good because the high prices in 2007 were not sustainable. Lehigh Valley employers' biggest concern is their inability to find qualified workers. Robots are doing a lot of the unskilled and semi-skilled jobs. Thee machines don't need health care. If the cost of employing people hits critical levels, the machines will be created to do the jobs. The Valley has seen increases in employment in fields including healthcare, transportation, warehousing, and hospitality. Retail employment is dropping sharply as is evidenced by the gaping empty storefronts in local malls.