Page 5 - BusinessWest September 2, 2024

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Matt Sosik wonders about the impact of mounting pressure on consumers, as evidenced by rising credit- card balances and loan delinquencies.
deficits are essentially “subsidizing GDP,” as he put it, thanks to stimulus money that is still being spent. “The consumer has really rolled with the punches.”
That said, he wonders for how much longer this will be true, not- ing mounting pressure on consumers, as evidenced by rising credit- card balances and delinquencies in paying those balances, mortgag- es, and car loans (more on that later).
Overall, many business owners have been in somewhat of a hold- ing pattern, said Ken Vincunas, president of Agawam-based Devel- opment Associates, noting this sentiment refers to decisions about investments in real estate — either building something new or sim- ply buying something — but also business decisions in general.
Many are waiting to see what happens with interest rates, but some are also waiting for the November election, the outcome of which may impact what happens with those rates and the economy in general.
“Everyone is holding their breath and waiting to see what will happen in November,” Vincunas said. “That’s
the big wild card right now.”
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For this issue, BusinessWest takes an in- depth look at the economy as the three-quarter pole approaches, what might happen the rest of this year and beyond, and the factors that will likely determine which way the arrows will be pointing as we move into 2025.
On-the-money Analysis
Nakosteen said the market’s pronounced dip early last month — there was a drop of nearly 10% — was interpreted widely as commentary on a weakening economy.
He didn’t see it that way — “I just interpreted it as people sold stocks because people were selling stocks” — and the market’s rebound
(it had recovered most all of what was lost by press time with this issue) would seem to vali- date that opinion.
“This is not breaking news, but the economy has held up really well in spite of a lot of pressure, especially from a rapidly
rising interest-rate environment. The consumer has really rolled with the punches.”
He acknowledged that the economy has
slowed somewhat, but, again, most indicators
would show that it is still strong, especially
when one considers the many factors impacting it, most notably interest rates.
Indeed, while he thinks the Fed should have lowered interest rates months ago — because it takes months for a rate drop to trickle down, if you will — he believes the Fed “got away with it,” as he put it.
“For at least seven or eight months, I’ve heard that the Fed should be lowering interest rates right now because higher interest rates are really going to drag down the economy,” Nakosteen said. “They haven’t. They may still, but they haven’t yet.”
Sosik didn’t use those words, but he was in general agreement that, despite some strong headwinds, the economy remains solid
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