National Economic Intelligence Report Provides Short-, Long-Term Outlook for U.S. Economy
With the V-shaped recovery officially complete and the level of economic output returning to its long-run sustainable growth path, Dr. Christopher Thornberg, Founder of Beacon Economics and one of the nation’s leading economists, provided his expert insights on how the pandemic stimulus has shaped the U.S. economy to-date, and how he anticipates it will be impacted for years to come.
Defining the New Economy
In the November 2021 Western Alliance Bank National Economic Intelligence Report, Dr. Thornberg points to key markers, including steady GDP growth since the initial downturn at the onset of the pandemic, strong activity in consumer goods and a booming housing market, that have benefited from the stimulus effort.
Also delving into employment figures, Dr. Thornberg points to a labor market paradox he is seeing, specifically the fact there are 4.5% fewer jobs in the U.S. than before the pandemic, yet there is a labor supply challenge that employers from coast-to-coast are experiencing. In his analysis, he points to a marked decline in the labor force resulting from fear, health issues, family or personal needs, retirement and even financial security that has come by way of flush pocketbooks from savings and the thriving financial markets.
In his three decades of experience analyzing data and trends, Dr. Thornberg shares that the U.S. could expect prosperous few years ahead, however he points to potential danger signs on the horizon, including:
Overheated equity markets;
Nationwide inflation that could potentially lead to the greater threat of stagflation;
Wage-fueled inflation for employers who will need to adjust prices to reflect higher labor costs;
Spikes in debt costs for the Federal government, in turn creating budget problems; and
The Fed shrinking the money supply to control prices.