Local economist talks possibility of recession
Published 8:30 am Saturday, January 6, 2024
Though many economists predicted a recession in 2024, Dr. Brian Peterson, vice president for academic affairs and economist at LaGrange College, said he doesn’t see a threat in our immediate future.
“I don’t know that we’re seeing that at this point because our employment remains as robust as it is. Because prices are not out of line with historical averages. GDP continues to grow and the [Federal Reserve] doesn’t look like it’s going to be changing interest rates, at least in the near future,” Peterson said.
In 2021, after the pandemic shutdown, consumers reentered the market with stimulus checks and a lot of “pent-up consumer demand.” The increased spending led to higher inflation rates. The Federal Reserve’s activity since then of raising interest rates is what caused some concern about a recession.
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Instead, Peterson said, the focus will be on whether the Federal Reserve increases interest rates in the next three to six months due to increased consumer spending. Then, Peterson said, the economy may be one step closer to a recession.
Though the employment rate seems to be stable, Peterson acknowledged that there could still be individual workers who are underemployed: working part-time or working in an underqualified job.
According to Chambers County Development Authority Director Chris Busby, the outlook in Chambers County has improved since pre-inflation days. He said the development authority is seeing a positive industrial and commercial development trend entering the local market.
“Locally, we’re as busy as we’ve ever been,” Busby said.
There has been more interest in “speed to market,” companies wanting existing buildings rather than green space. Busby said the local market tends to be more stable in these times, and some developers who were less willing to expand to Chambers County during the pandemic have started reaching out again.
“When it comes to commercial regular activity, secondary and tertiary markets, which is kind of what we are, tend to have a little bit more stability for retail growth,” Busby said. “And so I’ve seen a lot more interest, and we’ve got a lot of things in the pipeline, and so I’m very enthusiastic about that.”
Busby said the housing growth in the county has also been encouraging.
Though COVID-19 may still impact bigger communities, Busby said he hasn’t seen many residual effects in Chambers County. The only effect he has noticed is in the labor market as people begin reentering the workforce.
Peterson said the local economy in LaGrange is also moving in the right direction. The LaGrange-Troup County Chamber of Commerce has had an increase in corporations and small businesses entering the market.
“Being mindful of some of the different ways that the economy does impact people I think is important,” Peterson said. “But I do think that certainly in this area, this part of Georgia, we’re in for some significant benefits.”
On the macro scale, Peterson said the growth seems to be slow but steady — at least for now.
“The real issue then becomes what does growth look like? Historically, we’d like to see our GDP growing at about 3% a year, and we’re not at that target,” Peterson said. “So we will continue to see growth. It’s not going to be like the growth that we saw once, you know, 20-30 years ago.”
Still, Peterson warned that the economy is a “self-fulfilling prophecy” and can only remain stable if everyone’s expectations are aligned. He warned consumers not to change their spending behaviors out of fear of a recession.