By Dave Williams, Capitol Beat
ATLANTA − Georgia’s economy will enter a mild, short recession early next year that should only persist for about six months, the dean of the University of Georgia’s Terry College of Business said Friday.
The downturn will be prompted by the series of interest rate hikes the Federal Reserve board has ordered this year to curb inflation, rising energy prices brought on by the war in Ukraine and hits to personal wealth including a down stock market, Ben Ayers told a luncheon audience at the Georgia Aquarium in downtown Atlanta.
Georgia, however, is better positioned than other states to weather the recession because of its strong labor market and several major economic development projects that will pour investment into the state and create jobs, Ayers said.
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Nationally, low- and middle-income families will be hit hardest by the recession, said Mark Vitner, founder and chief economist at North Carolina-based Piedmont Crescent Capital. Those income groups will have a particularly difficult time coping with higher food, energy, and rent costs, Vitner said.
“For half of the country, the inflation rate is essentially doubled, 18% to 20%,” he said. “Real purchasing power has been wiped out.”
While Vitner held out hope the U.S. economy will experience a soft landing from the coming recession, he said it’s more likely there will be a series of “rolling recessions” such as persisted during the 1980s.
Vitner said the only solution to the recession lies in getting inflation down. Still, he agreed with Ayers that the coming downturn won’t be as steep as the Great Recession. He said the approaching recession likely will be followed by slow growth during the next two to three years.
This article was originally published in Online Athens. Read the full article here.