Economist: Consumer Spending, Growth Will Remain Solid In NEPA
PLAINS TWP. — Wells Fargo global economist Jay Bryson forecasts economic growth in the region and the U.S. will slow down this year compared to last year but consumer spending and employment growth will remain solid.
Real gross domestic product in the U.S. increased almost 3 percent last year, making it a strong year, he said. He said 2019 isn’t going to be a bad year but he expects the GDP will grow at a slower rate of about 2.3 percent.
“Last year was above normal because of tax cuts and government spending increases,” Bryson said. “It’s not like things are falling apart but we are just going back to where we were before.”
Bryson was the featured speaker at the 2019 Economic Outlook breakfast presented by Wells Fargo and hosted by the Greater Wilkes-Barre and Greater Scranton Chambers of Commerce Thursday at the Woodlands Inn.
He told more than 50 people who attended that consumer spending was one of the strongest on record last year and it remains strong.
“When I look at the overall economy right now, the consumer sector is solid,” he said. “It’s not like it was 10 years ago when consumers were indebted because of the housing crisis. We don’t have that today.”
Bryson expects the unemployment rate in the region, which is now at 4.6 percent, will continue to drop.
“If the economy continues to perform reasonably well here, then the unemployment rate should come down,” he said. “What you don’t have here is you don’t have a lot of people coming into the labor force here because the population growth rate is pretty slow.”
Economic expansion over the last 10 years has led to a tight labor market with more available jobs than workers, Bryson said.
“When you go into a recession, a lot of people get laid off and they’re waiting to get hired back,” he said. “The longer the expansion goes on, the more time there is for folks to find a job and they have. After a while, you start to run out of available bodies.”
As a result of the tight labor market, Bryson said he expects to see more growth in wages.
“You have the ability to go to two or three different places now because businesses want to hire,” he said. “Bargaining power is with you now. Instead of hiring you for $15 an hour, they might hire you for $17 or $18 an hour.”
Wico van Genderen, president and CEO of the Greater Wilkes-Barre Chamber of Commerce, said Bryson’s speech translates to what’s going in the area, especially with employment growth.
Thousands of jobs are coming to the area in new developments that include True Value Company, Adidas and Patagonia in Hanover Twp., he said.
“We’ve got more to come and they’re still building which is awesome. We’ve got a lot of stuff happening in the downtown,” van Genderen said. “I see the economy is really strong in the area and is really diverse.”
With the tight labor market and more baby boomers retiring, van Genderen said the issue he thinks the area might encounter is finding enough workers to fill all the available jobs.
“I’m worried we’re going to have a net deficit in our labor force,” he said. “The good news is we have 17 colleges and 50,000 college students in the area and a lot of them don’t think they could find a job here and they go. What we have to make sure that we do is align their skill sets with the jobs that are coming in and make sure they know there are jobs in the area and we would like them to stay.”
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