Economists don’t have crystal balls to predict the future, but they do have numbers.
Monthly jobs reports. Unemployment data. New business registrations. Consumer goods pricing. Regional home sales. Gross GDP. Whatever the Federal Reserve hints at about their interest rate plans.
They also have plenty of data to parse through in JOLTS (State Job Openings and Labor Turnover), CES-SA (State and Metro Area Employment, Hours, and Earnings) and the monthly CPI (Consumer Price Index).
Economists use all these to better understand where the economy is moving next. And Americans have big questions we want answered with these numbers. Will the US reach that soft landing everyone has talked about last year? Will I keep my job? And will my grocery bill keep rising?
Business owners have their own set of questions around what the economic outlook means for their ventures. So with 2024 well underway and all the 2023 numbers collected, we asked economists to put the crystal balls away and talk to us about the numbers. These are the numbers that trends and numbers that economists are focused on right now:
TEMPERATURE CHECK: THE JOB MARKET
Tom Barkin, President and Chief Executive Officer of the Richmond Federal Reserve, was down in Atlanta this week to speak to the Atlanta Economics Club. He described recent economic data as “remarkable,” as key indicators like core inflation are down and unemployment numbers are low.
“There’s just a lot more optimism than there was even three months ago,” Barkin added.
Liz Wilke, Principal Economist for the HR software company Gusto, feels similarly.
“The economy overall continues to defy expectations,” she told Hypepotamus. “Taming inflation has been good for businesses, good for workers, and good for people.”
Inflationary trends aren’t the only reasons for optimism. Overall job numbers were strong over the last several years, despite massive layoffs in the tech sector. The Southeast is heading into 2024 with particularly strong job numbers. Florida, North Carolina, and Georgia all added 100,000 new jobs since the pandemic, according to data provided by the Bureau of Labor Statistics’ regional office in Atlanta.
But it isn’t necessarily all rosy. Thomas More Smith, finance professor and Economist with the Goizueta Business School at Emory University, said there is still a fundamental “mismatch with what employers would like to have” and the talent that is available.
There is also the reality that the Great Resignation is over and that wage expectations are changing.
According to a new report from the Selig Center for Economic Growth at the University of Georgia, 2024 could see a sharp drop in the quit rate as “workers feel less confident” that better opportunities are out there.
“This will limit wage and salary gains because job switchers tend to see higher than average increases in pay. The lower quit rate therefore should reduce inflationary pressures,” the report added.
WHAT THAT MEANS FOR ENTREPRENEURS
But raw job numbers are just one part of the economic equation. The number of people who strike out on their own and build new businesses is an important indicator about where the economy is heading. And Wilke said the “entrepreneurship wave” that started during the pandemic is continuing to swell in 2024, meaning more new potential employers are out there that could help shape the workforce in the coming year and beyond.
“People start businesses for two reasons. One is to have flexibility and authority over their own time and life. And two, because they see more business opportunities. COVID changed our habits,” she added. “Digital technology changed a lot about how we can deliver services, how we can build value for other people, and how we get that to market. And I think it’s really shaken up a lot of the opportunities people see.”
TEMPERATURE CHECK: HOW ARE YOU FEELING?
If we collectively learned anything in 2023, it is that positive economic numbers don’t necessarily mean every company and individual is doing well. Our “Temperature Check” series is a chance to dive in and better understand trends that are impacting the Southeast entrepreneurial scene. In that spirit, we want to hear from you. How are you feeling about the state of the economy in 2024? Send us a note at updates@hypepotamus.com.
