By BRENT MARTIN
St. Joseph Post
A national economist gives an encouraging talk to the St. Joseph Chamber of Commerce, right after bracing them for a rough first half of next year.
Economist Chris Kuehl, managing director of Armada Corporate Intelligence, is turning optimistic about the economy in 2023.
“My position lately has been more glass half full than glass half empty,” Kuehl tells KFEQ/St. Joseph Post during a break in the Chamber’s Economic Development Summitt.
But Kuehl says the economy will go through a rugged first half of the year, then it will turn.
“So, it’s kind of hunker down, get past the next two quarters, and things get better,” Kuehl says.
Kuehl cautions business executives to prepare for a rough beginning to the new year, but encourages them that segments of the economy show signs of improvement, though it might not come until well into 2023.
“Basically, inflation has already peaked,” Kuehl says. “We’ve begun to see a lot of change globally as far as inflation, which slows down the central banks and they stop raising rates as aggressively as they have been and you’re also seeing a lot of improvements in things like commodity pricing. The biggest limitation right now is labor force.”
Kuehl is pleased the Federal Reserve raised interest rates this week by half a percentage point, rather than the three-quarter percent hikes it had been pursuing.
“It basically means that they’re slowing down. They are probably maybe a quarter or two away from stopping the rate increases altogether. And traditionally, once they’ve reached peak, about eight or nine months later, you’ll start to see rates come back down again,” Kuehl says. “It’s almost a joke among central banks that we do what we do until something breaks and then we decide to fix what we broke by lowering rates.”
Kuehl says the labor shortage will continue to push wages higher, a stubborn problem for efforts to tame inflation. Kuehl says economists have seen the labor shortage developing for quite some time.