WBJ Panelists Predict Steady, Sustainable Growth For U.S. Economy
The elements are in place for a good year for the United States economy, according to panelists who addressed a group of about 250 this morning at the Worcester Business Journal's annual Economic Forecast Breakfast at the Beechwood Hotel in Worcester.
"We're in a new expansion, a more sustainable expansion" said Robert T. McGee, director of macro strategy and research with U.S. Trust Bank of America Private Wealth Management. He credited spending stimulus by the federal government with helping the economy grow after the Great Recession without relapsing into another recession after 2010.
By contrast, he noted, the European economies "over-applied" fiscal austerity measures in some countries – notably Greece and Spain – to a point where it negatively impacted much of the rest of the continent. And countries such as China began to tighten their monetary policies, which began to slow their economies.
In 2013, McGee said, Europe "will continue to meddle along," while the U.S. is experiencing steady growth, evidenced in part by stronger corporate profits, which is causing stock markets to rise.
Another panelist, Jeff Fuhrer, executive vice president and senior policy advisor for the Federal Reserve Bank of Boston, sees bright days ahead in the U.S., with "quite modest" growth in the labor market. He also sees an increase in consumer confidence, which he said turned in the other direction last month before the White House and Congress reached agreement on a bill that averted the "fiscal cliff" on Jan. 1 that otherwise risked pulling the U.S. back into recession.
Also, "I think it's really clear that the housing market has turned around," he added. "If you're employed, it's a good time to think about buying a house."
The third panelist, Girish Navani, CEO and co-founder of eClinicalWorks in Westborough, touted the ability of information technology to help drive economic growth. Navani's company, which provides IT services to the health care industry, predicted big changes that will bring down costs.
"Health care is going to change in a dramatic way in the next 10 years," Navani said. "It has to change, because it is broken."
Part of that change, he added, will come when patients begin to see what they're paying and how they, rather than the insurance companies who pay most of the bills today, can control costs.
"The consumer is going to start asking for price visibility," which will lead to "another economic boom," he said.
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