The Fed executive praised the strength of the dollar worldwide, pointing out that it gives us greater buying power for imported goods. But that same strong dollar makes it harder for our manufacturers to sell products abroad.
“That tells me companies that rely heavily on exports may grow at a slower rate this year and next,” said John Coleman, SIOR, a member of AIRE’s Board as well as an Executive Vice President at Transwestern and head of the industrial practice. “We’re working with manufacturers and distributors that can exploit the positive dynamics of the recovering economy.”
Oppedahl spent a considerable amount of time talking about employment issues and trends, declaring that the US economy has seen good year-over-year job growth—better than in past recoveries. “We’ve replaced what we have lost,” he said. But he addressed that there may be concerns that what has been gained in the number of jobs has not been equaled in the quality of those jobs.
He also noted that while the Midwest is performing well, Illinois, with its Springfield issues, lags behind the rest of the county in jobs and recovery metrics.
As a nation, he said, “things are looking good, but there are some concerns.” Those concerns include:
- Level of long-term unemployed—our unemployed remains unemployed for a longer period of time than in past recoveries. This results in workers settling for lesser jobs than they may be qualified for.
- Labor force participation—this rate, the number of employable people actually employed, has been declining and is at 63 percent after peaking approximately five years ago at 67 percent; by contrast, in 1950 the rate was 59 percent.
- Wages growth remains weak—wage increases which were expected in the seven percent range are now at about one percent.
The Fed uses the federal Funds rate as a tool to stimulate the economy, and Oppedahl said keeping interests low for so long, was in essence, “the Federal Reserve pushing the accelerator to the floor. But you can’t push the pedal through the floor, so we need other factors besides interest rates to contribute.”
Oppedahl concluded by saying GDP is expected to grow, “it may not be real strong, but it will be growth; kind of like the tortoise and the hare.”