By Clint Thompson
An economic slowdown is expected for Georgia, but not a recession. Gopinath (Gopi) Munisamy, Distinguished Professor of Agricultural Marketing at the University of Georgia (UGA) College of Agricultural and Environmental Sciences, talked about Georgia’s economic outlook during the UGA Ag Forecast meeting on Jan. 26.
UGA estimated the probability of a recession for Georgia at 33% and just under 50% for the U.S., as the real gross domestic product’s (GDP) increase of 3.3% in the fourth quarter of 2023 provided additional encouragement.
“The numbers from last quarter’s GDP that came out (recently), 3.3% growth in GDP, that’s blockbuster. Everybody was expecting 2%. People are revisiting their hypothesis about the forecast for 2024,” said Munisamy, who believes the potential for a recession will be further reduced for 2024. “I’m guessing the odds have shrunk since that 33% number came out in December.
“It means more money in the pockets of people. The higher the GDP growth, the value of goods and services we produce as a country is higher. That means it’s accruing to somebody in the country. We don’t know who that is, but there’s more money to spend in the country, which means higher income. Higher personal income means you’re going to spend more. Americans have this idea of spend, don’t save.”
But Munisamy reminds those interested that the number of people filing for unemployment and the number of people remaining on unemployment continues to stay high. That gives him more cause for concern.
“My own since of it is, it all depends on the labor market. It might be just me, but I’ve been seeing a lot of layoffs in the last three weeks,” Munisamy said. “Layoffs, they start small but the real issue is it going to snowball into something big? I’m watching the employment numbers, the layoff numbers and how big the layoffs are. Let’s wait a couple of months in terms of how these layoffs accumulate. If they’re big enough, I would be concerned about the chances of a recession.
“I’m optimistic from the GDP number but am cautious from the unemployment numbers.”