DAVIS CHAMBER AND BANK OF UTAH EVENT
Brice Wallace
It’s not often that a keynote speaker tells his audience he wants them to leave “a little bit nervous.”
But not all speakers are Elliot Eisenberg. The chief economist at GraphsandLaughs LLC, Eisenberg is famous for presenting economic information in a pleasant, easy-to-understand and humorous way.
With plenty of both graphs and laughs for his audience, “The Bowtie Economist” recently told a crowd in Layton that a recession may hit this year and despite a “remarkably resilient” national economy, 2024 will probably not be a great year.
“The recession is going to last eight, nine months, seven months — not long,” Eisenberg said at an economic outlook event presented by the Davis Chamber of Commerce and Bank of Utah at the Weber State University-Davis Campus in Layton. “This won’t be a great year, but it’s not going to be an awful, terrible, memorably bad year. It won’t be.”
Acknowledging that about 45 percent of economists are predicting a recession, he said a main concern of his is that incomes will not keep up with inflation.
“I’m a little nervous. I’m not terrified, I’m not slashing my wrists, I’m not jumping out of an airplane and deploying my parachute. I’m just a little nervous, that’s all,” he said. “I don’t want you to walk out of here saying, ‘He thinks we’re going to have a recession and that’s terrible.’ No. I want you to walk out thinking, ‘He thinks we might get a recession and it’ll be garden-variety.’ … I want you to walk out of here a little nervous. Not real nervous, but just a little, just a little, just a little.”
The U.S. has had three bad recessions since the Great Depression: in the 1970s, in 1981-82 and in 2008-09, he said. “I’m not talking a recession like that,” he said of his 2024 outlook. “It’s not going to happen. … This will be a garden-variety recession.”
Such a garden-variety recession would see GDP, for example, with 1 percent growth rather than 1.5 percent, he said.
“Yeah, they’re small, nothing tragic happens, we get on and we forget about them,” Eisenberg said of such recessions. “If we get a recession, that’s what this will look like. This is not going to be a barn-burner, this is not going to be an economy-whipping recession.”
A year and a half ago, many economists predicted a recession by now. “I didn’t,” he said. “I thought that we would be getting weaker by now, but we haven’t quite, and I’ve gotten a little more optimistic that we avoid a recession. I still think we get one.”
Eisenberg cited several historical stats that lead him to think that way, but he also acknowledged that a recession can be avoided if household spending continues to be strong. Right now, “it’s spectacular,” he said. “We are spending our collective brains out.”
“As long as households are confident in their job and unemployment is low, they feel good, they spend, firms invest, the economy is good to go,” he said. “But if households lose confidence that they’re not going to have a job or that they’ll lose their job, they’ll pull back on spending, then firms stop investing and — congratulations — you’re in a recession, and recessions generally occur because of a loss of confidence. Consumers lose confidence, businesses lose confidence, and then we’re done.”
In PowerPoint slides and commentary, Eisenberg noted that the Federal Reserve has stopped raising rates, job growth will most likely slow, inflation should keep decelerating, and people should keep an eye on inflation and unemployment rates.
Nationally, household balance sheets have improved and will continue to do so. The cost of goods is coming down, in part because of better supply chains following the COVID pandemic. Auto sales “have been pretty good” because of a pent-up demand following COVID, and used-car prices “are coming way down.” The services sector is “hanging in there,” and while manufacturing is improving, it’s too small of a sector to drive the nation to higher inflation. “Manufacturing could go into a recession; the economy doesn’t,” he said. Likewise, the office-building sector is not doing well but that is not enough to wreck the economy, he added.
Eisenberg spoke in glowing terms about Utah, which is experiencing population growth twice the national rate although not as fast as in the past because housing prices are so high.
“But you’re still growing nicely, which is helpful,” he said. “You have population growth and in-migration. You’re a good state. Education levels are high. I mean, there’s no real problems here. You’re not like godforsaken Illinois or New Jersey. …”
Eisenberg presented similar talks at events in Lehi, Ogden, Salt Lake City and Logan that Bank of Utah coordinated with other chambers of commerce.