The latest economic data shows the economy growing fast but some experts insist bad times are on the horizon.
Economists from Moody’s Analytics are saying the GDP could grow by 4 percent in the second quarter of 2018.
The National Federation of Independent Business (NFIB) released its Small Business Optimism Index which showed business confidence at the highest level since the Reagan presidency back in the 1980s.
In Florida, the economy is also headed in the right direction. At the end of last week, Gov. Rick Scott announced 19,000 new private sector jobs were created in May as the state unemployment rate slipped from from 3.9 to 3.8 percent. A year ago, it stood at 4.2 percent.
Over the past year, Florida had an annual job growth rate of 2.4 percent compared to 1.9 percent at the national level. In his announcement last week, Scott pointed to almost 180,000 new jobs over the past year and more than 1.5 million created under his watch.
Despite the positive economic numbers, some experts are predicting a 2020 recession for Florida and the U.S. economy.
According to Brian Wesbury and Robert Stein, economists for First Trust Portfolios, former Federal Reserve Chairman Ben Bernanke is saying there will be trouble ahead.
Bernanke recently predicted that there would be “economic surprise” in 2020, hinting at a possible recession.
In a recent article, Wesbury and Stein note that Bernanke doesn’t back President Donald Trump’s tax cuts. In fact, Bernanke says the tax cuts “came at the very wrong moment.”
The two economists conclude Bernanke doesn’t have any real substance to back his recession forecast for 2020 but they noted some major concerns.
Government spending continues to rise rapidly, leading to increased deficits. This will put pressure on politicians. “If they were to raise tax rates, this could cause potential problems for U.S. growth,” Wesbury and Stein insist.
A recession could pose a major problem for Florida.
Asked by Florida Daily about the impact of a recession on the Sunshine State, Dean Stansel, an economics professor at the O Neil Center at SMU University who used to teach at Florida Gulf Coast University, said “It’s too early to tell.”
Stansel added that the Trump administration increasing tariffs along with higher interest rates could slow down the economy.
But Stansel also points out that other Trump policies–namely federal deregulation and tax cuts–could ensure the good times keep rolling.
Florida Daily also asked a leading expert about the state’s real estate market and the possibility of a recession.
“Not even close,” said Jeff Evans, who works for Greene Commercial Real Estate and is a real estate commentator on the Florida Radio Network. “Highly unlikely.”
Evans told Florida Daily that the single family homes market is currently at a good pace with some communities seeing demand outpacing supply.
For the moment at least, the dark clouds of recession don’t seem to headed to the Sunshine State anytime soon.
Contact Ed at Ed.Dean@FloridaDaily.com.
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