Jay Bryson, chief economist for Wells Fargo, addressed hundreds of Lehigh Valley business leaders at the Greater Lehigh Valley Chamber of Commerce's Economic Outlook 2024 event. Despite a tight labor market and elevated wages, Bryson believes the overall economy is healthy, with low unemployment and positive consumer spending. He predicts that the Federal Reserve will try to further slow down the economy before easing up on interest rates in 2024. The Fed has been aiming for a 'soft landing' by lowering inflation without causing a recession, and Bryson believes they have been successful so far. He expects the Fed to lower interest rates by May if the economy slows down enough. However, there is a 40% chance of a recession if the Fed waits too long to ease up on inflation. Small business owners in the Lehigh Valley are still looking to hire despite the tight labor market, which gives Bryson hope that a recession won't occur in 2024. Nancy Dischinat, executive director of the Lehigh Valley Workforce Development Board, advises businesses to focus on the skills needed for open positions and consider non-traditional candidates or coaching up current employees. The event was attended by about 700 people. [1351b104]
Russell Mills, vice president and senior regional officer of the Pittsburgh Branch of the Federal Reserve Bank of Cleveland, spoke at the Shenango Valley Chamber of Commerce’s 2024 Economic Forecast Breakfast. He highlighted the impact of population decline on labor force participation and job growth in Mercer County and the Mahoning Valley. Between 2012 and 2022, Mercer County lost about 6,400 residents, leading to a tighter labor market with an unemployment rate of 3.5%. Mills noted that while labor force participation rates for those aged 25 to 54 have increased, there has been a decline in participation among those older than 55. Mercer County's employment recovery from the pandemic lags behind other regions, with the Youngstown area down 3.6%. The biggest sectors of growth in Mercer County are leisure and hospitality jobs, which have grown by 5.4%, and construction, which is at 3.2%. However, government jobs in Mercer County are down 2.5% and professional business jobs are down 1.2%. Mills also mentioned that manufacturing in the region, where 19.3% are employed in the sector, grew by 1.2%. He highlighted the optimism among manufacturers for potential growth, particularly in areas such as electric vehicles and microchips. Consumer spending remains strong, driven in part by savings built up during the pandemic. Despite persistent inflation, the U.S. economy remained resilient in 2023, with a 3.1% GDP for the year. Mills cautioned that a drop in inflation does not mean a drop in prices, as prices are still increasing at a slower rate. The Federal Reserve Bank of Cleveland's research shows that demand for commercial and industrial lending and commercial real estate loans remains low. The commercial real estate market is difficult for offices, but retail is doing well across the U.S. Home sales remain low while prices remain elevated in the area. [e5b67b48]
The United States has experienced its warmest winter on record. The government is set to release the second of three estimates of GDP growth in the US during the October-December quarter. Workers at Kroger have authorized a strike, but the Princeton Kroger is not included in the possible Kroger closures. The Princeton City Council is addressing issues related to the animal shelter. Dense fog is expected in some areas this morning. Two obituaries are listed for Kennett Ronnie Sherwood and Ruth Norman. The former Mercer Street bank building has been authorized for sale at $1.7 million. American Rescue Plan grants are available again in Mercer. Virginia High defeated Graham's season in basketball. The Tazewell boys program is being rebuilt. The Bluefield 400 Block demolition has begun. The shooting outside Brushfork Armory is still under investigation. Virginia State Police are calling attention to fatal pedestrian crashes. Graham will play Virginia High at Lebanon. [8fa3dbbc]