Fed economists paint positive financial picture at chamber event 

Presenting an economic snapshot of local and national data to Springfield business leaders on Aug. 16, economists from the Federal Reserve Bank of St. Louis acknowledged that recession predictions for 2023 were prevalent last year but the landscape has since shifted. The U.S. economy is showing resilience despite rising interest rates from the Federal Reserve, as gross domestic product grew 2.4% in the second quarter, according to the Commerce Department. Consumer spending was also solid last quarter, according to financial officials, though it slowed to a 1.6% annual rate from a robust 4.2% pace in the year’s first quarter. 

“One of the things that really has been striking is just how much stronger GDP growth has been,” said Kathleen Navin, St. Louis Fed senior business economist at the chamber event. “When we were about this time last year heading into the fall, a lot of forecasters – private and various others – were looking for a recession to start, whether it be in late 2022, or early 2023. But as the economic data continues to come in, it's simply surpassing expectations.” 

Nathan Jefferson, an associate economist at the St. Louis Fed, said he mentioned recession concerns at last year’s Economic Outlook. The annual event is organized by the Springfield Business Development Corp., the economic development arm of the Springfield Area Chamber of Commerce.  

“We had, going into this year, a lot of concern about what this year would hold,” he said. “By and large, a lot of that concern has been alleviated because consumer demand has been so strong. Now for Springfield, specifically, a lot of that has been services demand.” 

U.S. GDP gains have averaged above 2% in the first half of 2023, and while Navin said growth also is expected for the third quarter, the total varies. For example, the Atlanta Fed predicts 5.8% growth in the third quarter, according to updated projections, which is higher than other estimates she’s heard. 

“There is definitely a lot of uncertainty right now about how strong the third quarter will be, but those are much more healthy than we would have expected at this time last year,” she said. “I would just emphasize here that things are continually changing, and we’ll monitor that to see if they kind of surprise to the upside or downside. But, as of right now, the expectation for subdued growth is really kind of getting pushed forward into the 2024 time frame.” 

The Economic Outlook event held at the Oasis Hotel & Convention Center was attended by 360 people, a dip from last year’s attendance of 425, according to chamber officials. 

Read more about the Economic Outlook event in the Aug. 21 print edition of Springfield Business Journal.