Economic prospects in times of transition
By: Diana Bello Aristizábal
With a little more than three months left for the year to end and just two for the U.S. presidential elections, scheduled for Nov. 5, a lot of families are wondering what they can expect from the economy in these times.
At first glance, the latest figures seem to show things are heading into the right direction. The annual inflation rate was of 2,9% for the 12 months ending July 2024, compared to the previous rate increase of 3%. These statistics display inflation is getting closer to the 2 percent goal set by the Federal Reserve.
Regarding unemployment, the current rate at the national level is at 4,3%, compared to the 3,3% at the state level, while the anticipated number of initial jobless claims for the week ending August 31 was of 227,000, a decrease of 5,000 from the previous week’s revised level, the Labor Department reported.
Beyond numbers
Although economic reports serve as a reference, for the regular citizen, the one who goes to work and then finds high and unaffordable prices, what matters is making ends meet and having good job prospects. In this regard, two economists shared their analyzes, first breaking down a little bit the general overview of the economy.
“We are in a complicated monetary situation with interest rates that have been raised significantly to try to tame inflation and yet the International Monetary Fund is currently predicting that the United States economy is going to grow faster than that of other developed countries,” says economist Tulio Rodríguez.
He reveals the organization raised its growth forecast for 2024 to 2,7%, which makes sense in an economy with a large consumption capacity such as the United States, and that its possible inflation drops an average of half point in the near future. On the Consumer Price Index, a great concern for citizens, he states it has been declining. “Prospects are good.”
A similar opinion is shared by David Andolfatto, chair of the Department of Economics at Miami Herbert Business School of the University of Miami, who states that although for the vast majority of people wages have not increased at the level of prices, the good news is that inflation seems to have stagnated and there are available jobs.
“There are signs that inflation is softening, but I am skeptical that it will go down. The unemployment rate is still quite low, especially in Miami-Dade that as of June 2024 was of 3,1%.” This places the county in a better position relative to the country and the state, although there are persistent concerns around the fact salaries remain too low to cover current housing costs that have reached alarming rates.
However, things may change in light of elections. For Tulio Rodríguez, both Kamala Harris, for the Democratic Party, and Donald Trump, for the Republican Party, would contribute differently to the economy based on their tendencies.
“In the case of Trump, what in theory would happen if he won is that the banking industry and health care would benefit, and the oil and gas businesses would be boosted. In Harris’ case, emphasis would be placed on renewable energy initiatives, telecommunications projects and social policies. The problem is that we have a debt of 34 trillion dollars. If you ask me who I vote for, I will say that for the one who makes the national treasure grow.”
But regardless of this scenario, the conclusion reached by both economists is that to move forward in these times it’s imperative to understand the world no longer works as before. The labor market requires versatility, greater technical skills, knowledge that no longer necessarily comes from universities, and self-employment.