Newsletter - Kamran Afshar Associates Inc.

Explore the latest Lehigh Valley Economic Review

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BROWSE POSTS

Is the US economy in a recession?

6/10/2024, 4:59:45 PM

According to the Harris poll, 56% of Americans believe the US is in a recession. Before moving ahead, let’s review the definition of recession, a period of falling GDP, with plummeting employment causing high unemployment rate and falling retail sales, usually accompanied by the stock market and purchasing power dropping. So, let’s look at each of these indicators separately.

Business borrowing, how does it affect the economy?

3/27/2024, 5:33:35 PM

Of all the indicators of the economy's future growth, the volume and change in the level of business borrowing stand out as significant barometers of future economic activity. Business borrowing is typically for expansion purposes. Banks do not easily grant loans solely to cover payroll expenses, especially not on a recurring basis. Banks lend money primarily to entities that do not urgently require the loans. To be fair, banks are also businesses themselves and must ensure a reasonable certainty of debt repayment.

Our national debt is now larger than our GDP, is it possible to reduce the debt

5/23/2023, 5:32:35 PM

The national debt is now at $31 trillion and will continue to rise. At this level, it is 119% of the country's Gross Domestic Product. Yes, the national debt is larger than the GDP, and it has been since 2015. However, as high as the debt is, it is not the first time that debt has exceeded the GDP; at WWII's end, the debt stood at 121% of the GDP. And much closer to the present, during the 2nd quarter of 2020, national debt rose to 135% of the GDP, even higher than after WWII. The interest payment on the WWII debt was less than 1.8% of the GDP, which is obviously due to the very low interest rates of the time.

We are using less electricity

4/1/2023, 12:35:35 PM

According to the US Energy Information Administration, we use less electricity per capita. While we have increased our electrical usage by 16% this century, US population increased by 20% during the same period. On a per capita basis we have reduced our electrical consumption by 3% since the beginning of this century.

Lehigh Valley's economy grew by 0.8% in 2022

11/16/2024, 4:16:34 PM

According to the Bureau of Economic Analysis, the Lehigh Valley's GDP for 2022 rose to $54.3 billion. After adjustment for inflation, the Valley’s economic growth in 2022 was 0.8%. We have borrowed the term Gross Domestic Product from a nationwide concept to apply it to regional economies. The term basically means the total output of goods and services produced by labor and capital located, in this case, in the Lehigh, Northampton, Carbon, and Warren counties.

Car Sales in the US

11/4/2024, 2:58:39 PM

Cars are often the second-largest consumer expense after housing. While housing usually accounts for the largest portion of a consumer's budget, automobiles follow closely behind, making them one of the most significant purchases people make.In September, car and light truck sales adjusted for seasonality reached 15.8 million units annually, half a percent below last year’s level.

Are we leaving this $34 trillion and rising national debt to our children to pay?

4/8/2024, 2:54:38 PM

The national debt is now at $34 trillion and appears to continue to rise for the foreseeable future. This puts the national debt at 121% of the GDP, which is huge but below its record high of 133% in the 2nd quarter of 2020. And while 2020’s Covid emergency made it an exception, national debt did not exceed 121% of the GDP even during WWII. Carrying debt creates several issues, the most pressing one being interest payment.

Real Retail Sales are easing down from their inflationary levels

6/4/2024, 8:29:04 AM

After the COVID shutdowns, retail sales exploded upwards, rising by more than 18% in 2021, followed by another historically high increase of 9% in 2022. During these two years, retail sales increased by more than $150 billion. The equivalent of 8 years of increases before COVID.

Payroll employment rose by 254,000 in September

10/15/2024, 11:03:10 AM

According to the Bureau of Labor Statistics, payroll employment rose by 254,000 in September, well above expectations. 2.4 million new jobs were created in the last 12 months, and the unemployment rate dropped to 4.1%, still in the full employment range