Recent Economic Developments, by Dr. Robert Eyler, PhD, SSU
Our speaker for February 8, 2020, was Dr. Robert Eyler, PhD, President, Economic Forensics and Analysis, and Professor of Economics at Sonoma State University. Dr. Eyler received his undergraduate degree from Cal State Chico and his PhD from the University of California at Davis. He is a member of the Board of Directors of Redwood Credit Union and a Sonoma County native. He spoke to us about recent economic trends.
Dr. Eyler compared the U.S. labor market’s response to the Great Recession (roughly, 2007-2009) with the recent Covid-19 recession. It took 78 months (6 ½ years) from November 2007 to go from the same number of workers in the U.S. to getting back to that number of workers! We are 98.8% of the way back from the Covid-19 recession. We could see a slow down in the recovery due to inflation. In the wake of the Covid-19 “recession”, we’ve seen a real spike in the price of goods and services. Things to look for on the inflation front include whether prices are stabilizing or falling, whether ports are clearing, whether the Federal Reserve raises rates too quickly, whether wages continue to rise, how many workers permanently retire, and how much will housing prices rise. Regarding the equity markets, its been crazy for the past few months, but we’ve seen a remarkable recovery from the Covid-19 recession with a sharp increase in the equity market. There is some sign, however, that the bull market is slowing, and economists will look at that issue carefully.
The Sonoma County situation is similar to the national situation. Here, it took 98 months to recover from the Great Recession in terms of the labor market. We are now at 96.9% of the pre-Covid-19 labor market rates, but we’ve also hit a road-block, which may or may not be caused largely by the recent Omicron surge and related shut-downs. Housing has been an amazing market if you own, but not so great if you don’t. The 2022 forecast for California is a 14.2% increase in housing prices. Sonoma County forecast is 9.3%.
There are some economic headwinds, including high housing prices and low surplus, the fact that Sonoma County has lost population for the 5th year in a row (and California has a net population loss for the first year ever!), whether there will be a more permanent indirect interaction with the Bay Area, and the lingering costs of Covid-19 in terms of the cost of doing business and business retention.
Dr. Eyler also addressed a wide spectrum of questions, including the lack of equality in growth unless are in the housing and/or equity markets, and the effect of Covid-19 and other economic factors on communities of color and on the entry wage job workers.
Thank you Dr. Eyler for the whirlwind tour of the current state of the economy! Your insights are valuable and appreciated.
View Dr. Eyler's presentation by clicking HERE. The video will be available for a short time.
