{"id":51756,"date":"2023-01-23T09:38:47","date_gmt":"2023-01-23T14:38:47","guid":{"rendered":"https:\/\/www.unionvilletimes.com\/?p=51756"},"modified":"2023-01-23T09:38:49","modified_gmt":"2023-01-23T14:38:49","slug":"ccedc-offers-2023-economic-outlook-inflation-likely-to-slow-but-a-recession-may-be-coming","status":"publish","type":"post","link":"https:\/\/www.unionvilletimes.com\/?p=51756","title":{"rendered":"CCEDC offers 2023 economic outlook: inflation likely to slow, but a recession may be coming"},"content":{"rendered":"
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(l to r): Dianne P. Manges, Senior Investment Advisor for Truist Foundations & Endowments Specialty Practice; Gary W. Smith, President and CEO of CCEDC; Patti Brennan, President and CEO of Key Financial, Inc.; MaryFrances McGarrity, Senior Vice President – Business Development Services at CCEDC<\/p><\/div>\n

150 business executives and personal investors gathered Friday to hear expert insights on the local, national and global impacts of an unprecedented post-COVID economy at the Chester County Economic Development Council\u2019s 19th<\/sup>Annual Economic Outlook.<\/p>\n

The event was held at Penn State Great Valley and featured President and CEO of Key Financial, Inc. Patti Brennan<\/a>, CFP, who was named a Hall of Fame Advisor by Dow Jones & Company\u2019s Barron\u2019s, as well as economic specialist Dianne P. Manges<\/a>, CFA, Director\/Senior Investment Advisor for Truist Foundations & Endowments Specialty Practice.<\/p>\n

\u201c2022 was the year of surprise,\u201d said Brennan, noting Russia\u2019s invasion of Ukraine and supply chain issues continuing longer than anticipated. \u201cAs a result, inflation spiraled up quickly and the Federal Reserve had to be as aggressive in fighting inflation as it was in fighting the impact of COVID during the global shutdown.\u201d<\/p>\n

Brennan notes that 40% of inflation measurements are housing related. Since there is a 12- to 18-month lag in this data being included in CPI, we\u2019re now dealing with the underlying inflation of 2020 and 2021 instead of what the data reflected back then. Supply chain issues are not back to pre-pandemic levels, but they are getting better, and an aggressive Fed policy is having its impact as well. She anticipates inflation will continue to come down in 2023.<\/p>\n

\u201cThe final surprise of 2022 was how the bond market responded to rising rates,\u201d Brennan said. \u201cSince the Great Depression, we\u2019ve only had three years where the bond market has been negative. Until last year, there has never been a year where the bond market was down double digits, yet we saw a loss of 13% in a bond index! Surprises move the economy and the markets negatively. It\u2019s okay to be surprised, but we can be prepared for the surprises. Surprises can be positive ones, too, and it\u2019s important not to miss out on those. Volatility is one thing; many investors will never recover from opportunity cost.\u201d<\/p>\n

Brennan said one thing that wouldn\u2019t be a surprise is a recession. \u201cIt\u2019s the most expected recession ever. Businesses and consumers have been preparing for it, so the damage may not be as severe. The numbers are showing that the American consumer has never been in better shape heading into a recession, and corporations also have very strong savings on their balance sheets. If we end up in a recession, we\u2019re in good shape fundamentally to weather that storm,\u201d Brennan said.<\/p>\n

Manges said, \u201cWhile recession risks for the next 12 months have risen sharply, in the U.S., a recession is not necessarily \u2018baked in.\u2019 Clearly, we have the tightest global monetary policy in 40 years, from the Fed to minor and major central banks tightening to fight inflation after a massive stimulus. But consumer spending is expected to be quite strong in 2023 and the labor market is tight. The American consumer has the potential to keep us above water.\u201d<\/p>\n

While concerns about Ukraine and China are top of mind for many investors concerned about recessionary pressures and sluggish growth, Manges pointed out that, together, the U.S. and Europe make up half of the global economy and will be the driving force for gauging health of the economy and policies in 2023. She\u2019s cautiously optimistic about China\u2019s President Xi Jinping beginning a third term and delivering GDP growth over 5%. \u201cHe\u2019s aggressive and competitive. If he can get China back on firm footing, I would not be surprised to see some growth measures coming out of China. China could go either way, dependent upon President Xi stepping on the gas,\u201d said Manges.<\/p>\n

Overall, Manges said diversified investment managers had been scaling back their asset allocation slightly in global markets heading into 2023 with an aim to go higher once they see developed economies like the U.S., Germany and Great Britain on better footing.<\/p>\n

Here at home, Brennan expects higher borrowing costs to continue and unemployment to pick up, so she advises people to keep their emergency funds flush. She also sees great opportunity for retirees and older workers. \u201cRetirees have had to tolerate more of their money in stocks, because bonds were paying minimal interest. Now we have more options.\u201d She also notes that empty nesters who are behind on their retirement planning can now put $22,500 into their 401(k) plus another $7,500 each year. \u201cA couple of empty nesters who might feel a bit behind can put $60,000 into a 401(k) to catch up, and they should,\u201d said Brennan.<\/p>\n

The Chester County Economic Development Council continues its 2023 programming with the 11th<\/sup> Annual SEI Energy Briefing on February 28, presented by CCEDC\u2019s Smart Energy Initiative of Southeastern Pennsylvania and focusing on the impact of the Inflation Reduction Act (IRA) on solar, electric vehicles (EV), geothermal and CHP. More information is at www.ccedcpa.com.<\/a> You can also view CCEDC\u2019s interactive Annual Report at https:\/\/annual.ccedcpa.com\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

150 business executives and personal investors gathered Friday to hear expert insights on the local, national and global impacts of an unprecedented post-COVID economy at the Chester County Economic Development Council\u2019s 19thAnnual Economic Outlook. The event was held at Penn State Great Valley and featured President and CEO of Key Financial, Inc. Patti Brennan, CFP, […]<\/p>\n","protected":false},"author":1,"featured_media":51755,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[14949,7426,14948],"class_list":["post-51756","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-economic-forecast","tag-featured","tag-the-chester-county-economic-development-council"],"_links":{"self":[{"href":"https:\/\/www.unionvilletimes.com\/index.php?rest_route=\/wp\/v2\/posts\/51756","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.unionvilletimes.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.unionvilletimes.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.unionvilletimes.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.unionvilletimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=51756"}],"version-history":[{"count":1,"href":"https:\/\/www.unionvilletimes.com\/index.php?rest_route=\/wp\/v2\/posts\/51756\/revisions"}],"predecessor-version":[{"id":51757,"href":"https:\/\/www.unionvilletimes.com\/index.php?rest_route=\/wp\/v2\/posts\/51756\/revisions\/51757"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.unionvilletimes.com\/index.php?rest_route=\/wp\/v2\/media\/51755"}],"wp:attachment":[{"href":"https:\/\/www.unionvilletimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=51756"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.unionvilletimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=51756"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.unionvilletimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=51756"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}