Economist says economy to further cool down
Ryotaro Tashiro presents 2024 economic forecast to chamber members
The Northeast Berks Chamber of Commerce recently hosted its annual economic forecast presentation, featuring returning speaker Ryotaro Tashiro, a senior outreach economist for the Federal Reserve Bank of Philadelphia.
“This event allows our members to receive vital information from the Federal Reserve Bank of Philadelphia regarding economic trends,” Chamber Executive Director Treva J. Florence said in a statement.
Previously scheduled to be held on Jan. 19, weather postponed the event until Feb. 23.
Held at 11:30 a.m. in Kutztown University’s Georgian Room, more than 50 people were in attendance at the 2024 economic forecast presentation, both members and nonmembers.
“The attendance did not seem to be affected by the rescheduled date. In fact, I believe it allowed us additional time to get the attendance we had today,” said Florence.
The program was once again sponsored by Fleetwood Bank.
“This event has been continuously sponsored by Fleetwood Bank over the years,” said Florence. “Tim Snyder, the president and CEO of Fleetwood Bank, is on the board for the Federal Reserve Bank of Philadelphia.”
Tashiro returned as the keynote speaker for the Chamber’s annual economic forecast presentation.
“I have spoken at this chamber event every year since 2017. I always look forward to having a good discussion about the regional economy,” said Tashiro. “I hope attendees find my presentation valuable. I learn a lot each year through my conversations with them.”
Tashiro’s presentation focused on the general economic conditions, labor market conditions, inflation, housing conditions, and monetary policy implications.
“While the level of economic activity may still be high, its growth has slowed down in the past year. Labor market data are indicating continuous cooling down; however, the market remains tight and firms continue to report hiring challenges,” Tashiro said in a statement regarding his overall message to chamber members.
“Inflation is still higher than the Fed’s target — but recent trends show that we are moving in the right direction,” he said.
Regarding the state of the economy now, Tashiro said: “One business contact recently described their current sentiment as ‘not terrible, but not great either,’ which I think summarizes what I see in the data.”
“On one hand, we still see business activity across the board, firms continue to hire, and there are no reports of significant layoffs in the region,” he continued. “On the other hand, growth appears to be limited and various indicators suggest that we would continue seeing slower activity going forward.”
Offering a few comments on some of the changes over the past six months to a year, Tashiro said: “On the consumer side, we are starting to see some evidence of a slowdown after years of high post-pandemic activity levels. On the business side, there have been reports of slower activity.”
Commenting on some challenges of the economy, he said: “Business contacts reported that high interest rates and tighter lending standards have resulted in challenges accessing capital. Also, while the labor market has been cooling off, the market remains tight as firms continue reporting staffing challenges. Finally, general uncertainty appears to be making the decision-making process more challenging for both consumers and businesses.”
What can we anticipate in the near future?
“I anticipate the general economy to further cool down. As we see the continued slowdown of the economy, I also anticipate inflation and the labor market to further cool down,” Tashiro said.
Outlook for inflation? “While inflation is still higher than where we’d want it to be, we have made considerable progress over the past year,” he said.
Tashiro said inflation is down from 6.4% in January 2023 to 3.1% in January 2024.
Shelter and service spending categories are the largest contributors to inflation, he said.
“As the labor market further cools off and wage growth continues to decelerate, I anticipate that the impact of service spending categories on inflation will cool off in the near future,” Tashiro said.
Contribution from housing remains tricky, he said.
“While the demand for housing appears to be down due to high interest rates, supply of housing has been significantly below pre-pandemic levels. As a result, deceleration of home price growth has been slower than anticipated,” Tashiro said.
Prior to joining the Federal Reserve Bank in June 2016, Tashiro was a business analyst for Bloomberg, where he conducted research on issues related to equity data quality. He has a master’s degree in economics from the University of Michigan-Ann Arbor and a bachelor’s degree in economics from Kenyon College.
The Chamber also held annual meeting on Feb. 23.
“The 2024 economic forecast breakfast and annual meeting provided the opportunity for the chamber members to come together and review the 2023 year chamber activities, to recognize accomplishments and the chamber volunteers, and gives us the opportunity to announce the chamber priorities as well as upcoming events for 2024,” said Florence.
“This meeting helps us achieve our goals of chamber member-to-member activity and structure as well as allow members and nonmembers alike to gain additional insight on their business outlook for the 2024 year,” said Florence.