Economist John Mitchell
STOCKTON — The U.S. economy should grow at a faster clip in the coming year. That was the message economist John Mitchell brought to San Joaquin County’s business community this morning at the economic forecast breakfast, presented by the Bank of Agriculture and Commerce.
“We’ve got low inflation, the employment is back. People are feeling better. Balance sheets are restructured. Our monetary policy, the emergency stuff is over,” Mitchell said in an interview after the event. “We should grow. I mean, look at the rest of the world. We’re one of the strong spots, if not the strong spot.”
During his presentation before a group of a couple hundred business leaders at the University Waterfront Plaza Hotel, Mitchell pointed out that economic data from December 2014 showed every state in the nation had showed growth and that California was ranked 16th.
“I don’t remember the last time I saw all 50 states growing,” Mitchell said.
Mitchell said jobs were added in all sectors except the federal government in 2014 and that would be a theme that he expected to continue in 2015.
Much of the optimism in the American economy is being driven by falling energy prices, Mitchell said. He told of pumping gas at a station in Idaho where the price was under $2.00 a gallon.
“It just felt like you were getting away with something,” he said.
That extra disposable income has led to more robust economic spending, which in turn has driven sales tax revenue.
According to Mitchell, the United States is still dealing with issues from the Great Recession as well as remedies that were put in place to mitigate the recession, such as lending restrictions. He said the fact that many people, especially first-time home buyers, have had a difficult time qualifying for loans has hurt socio-economic mobility in the country.
While lower prices have helped the United States, deflation has been hurting the European economy. Under Mitchell’s list of things to ponder was whether the United States could continue to grow while the rest of the world slows.
Financial planner Chris Weed was at the breakfast and said he heard what he expected to hear.
“Basically in 2015 you are going to see the dollar stay strong. I agree. There’s going to be flight to safety. People are going to want to invest in the U.S.,” Weed said. “You will see a market correction. We haven’t had one of those of more than 10 percent in three years. Things are going fairly smoothly, but nobody realizes it.”
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