“Today’s program looks at the mid-year economic update. Mike, we are now in the second half of the year. When the year began there were many concerns about the pace of economic growth, and the possibility of a recession. What’s the view now?”
“Well the economy has continued to grow over the first half of the year. Production is up. Jobs are up. Wages and incomes are up. Inflation is tame. I think the biggest surprise of the first half of the year has been the drop in interest rates. So overall it’s been a good economy. It’s not been a fabulous economy, and rather than having a recession we have had a slower pace of economic growth.”
“We don’t have the second quarter numbers in for the growth of the economy, but many think it’s going to be closer to two percent rather than the three percent of the first quarter. So I see this combination continuing. I don’t see any recession on the horizon unless there’s some big, unexpected event out there that none of us see or can predict. So I see the slow growth continuing.”
“I don’t see a recession for the last half of the year. As has been for the entire year, I think the big unknown, in terms of something we do have some control over, is the trade dispute with China. I think if that goes on that could keep the economy slowed. If we have a trade resolution with China we could see a burst of growth. Regarding the surprise of lower interest rates, many think that’s going to continue. We expect the Federal Reserve to cut their interest rate next time that they meet.”
“So in my mind I think that the focus now is shifting to 2020, and what’s going to happen to the economy in that year.”
Mike Walden is a William Neal Reynolds Distinguished Professor in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic outlook and public policy.