An economics professor at a small college in Texas is now offering her insights into 2024 after making shockingly accurate predictions in an economic forecast survey last year.
Belinda Román, an associate professor of economics at St. Mary's University in San Antonio, provided some values that largely matched the actual numbers the federal government reported last year.
She ranked first among 71 business, academic and financial experts who provided their forecasts in The Wall Street Journal's January 2023 quarterly economic forecast survey.
Before coming to St. Mary's, Román was a professor of economics at Palo Alto College in San Antonio and had worked in Latin America and the United Kingdom for both nonprofit and private companies.
Looking ahead to 2024, she once again expects something different than the consensus of many forecasters and shares both good and bad news for the new year.
Belinda Román, associate professor of economics at St. Mary's University in San Antonio, now offers her insights into 2024 after making shockingly accurate predictions in an economic forecast survey last year
Looking ahead to 2024, she once again expects something different than the consensus of many forecasters and shares both good and bad news for the new year
Román is optimistic about economic growth, employment and job growth in 2024, forecasting GDP growth of 2.6 percent, well above the consensus estimate of 1 percent.
“I didn’t think we would have zero growth. “I thought that was way too pessimistic,” she said.
“I didn’t feel like we had lost any of that momentum yet, and the forecast of very low or zero growth just didn’t seem right to me.”
January's unexpected job gains appear to be in line with Román's forecast, as the U.S. economy added 353,000 jobs, a promising gain heading into 2024.
The unemployment rate also remained at 3.7 percent, according to Bureau of Labor Statistics data released Friday, defying expectations of an increase to 3.8 percent.
This is the 24th consecutive month that the unemployment rate has remained below 4 percent – the country's longest level since the 1960s.
Román also expects higher inflation but lower interest rates than other economists predict. That could make it more affordable for Americans looking to get on the housing ladder to get a mortgage.
Their forecasts come at a time when economists have been speculating about when the Federal Reserve might start cutting interest rates.
At its last meeting on Wednesday, the Fed voted to keep interest rates stable for the fourth straight day, keeping the key rate between 5.25 and 5.5 percent.
Federal Reserve Chairman Jerome Powell said he was confident about the economy and the downward trend in inflation, but warned there was still “a long way to go.”
He also ruled out the possibility of an expected rate cut in March.
Román was similarly optimistic at the start of 2022 and 2023. Its forecast of 2.8 percent GDP growth in 2023 was roughly in line with the 3.1 percent reported by the Commerce Department.
It also forecast an unemployment rate of 3.4 percent, well below the consensus of 4.3 percent.
And she was right, because the unemployment rate remained constant at 3.7 percent towards the end of the year, well below economists' forecasts.
The US economy added 353,000 jobs in January, exceeding economists' expectations
The unemployment rate also remained at 3.7 percent, according to Bureau of Labor Statistics data released Friday
Román was similarly optimistic at the start of 2022 and 2023. Its forecast of 2.8 percent GDP growth in 2023 was roughly in line with the 3.1 percent reported by the Commerce Department
However, Román acknowledged that the new year is uncertain, citing politics as a major factor.
“The real issue for me is still the political environment.” “We don’t know whether it’s Biden or Trump, and we don’t know what the international impact will be,” she said.
“Those are the two wild cards for me… But I still think we will grow.” “It may be that we don't grow by 5, 6, 7 percent.”
Román told the WSJ that one of their tactics is to focus on moving averages and trend lines instead of models.
She often wonders what story the data tells, a technique she often passes on to her students at St. Mary's, a Catholic liberal arts university in the Southwest.
She said: “Many students get lost in the technical, in the mathematical, and forget that there is a story that involves people.”
“The math is great, but it's the people we're talking about.” People in the form of companies, in the form of communities, in the form of countries. That’s why we always have to keep that in mind when we do our work.”