Economist's optimism for economy weakens after 2026
Oct. 31—LIMA — Economist
During his presentation at
2025 forecast
Morgan predicts economic growth will decline in the fourth quarter of 2024 and the first quarter of 2025. He believes the economy will continue to grow in 2025, avoiding a recession. Morgan assumes the
Current economy
Consumers account for nearly 68 percent of the nation's gross domestic product.
"To have a recession, you have to see consumers stop spending or spend less," he said.
Government spending, which comprises about 17% of the GDP, has contributed heavily to consumer spending over the last 18 months primarily from stimulus programs, causing inflation.
To address inflation, the
If raising incomes can suffice for raised prices in a reasonable timeframe, Morgan isn't as worried about inflation.
"It takes time," he said about raising incomes to catch up with inflated prices.
Unemployment
The
As of
"The JOLTS index is volatile because not every company fills out the monthly survey, but the low number is still worrying," he said.
The low amount of unfilled openings could lead to lower consumer spending.
Federal debt
The current federal debt is approximately
"This is something we cannot live with," he said.
The main ways to reduce federal debt are to raise taxes, cut spending, or use a combination of both, which Morgan is not confident about.
Housing
There aren't enough homes to meet the demand, Morgan said.
"One of the dumbest things you can do is give money to people for a down payment on a house," he said. "There are not enough homes on the market, and this will only raise prices."
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