Inflation, home values, and the job market: Important takeaways from our April economics webinar
This webinar included views from local economics expert and UCLA Anderson School of Management professor Jerry Nickelsburg is not a reflection of the opinions, views, or predictions of Nuvision and its representatives
Watching prices rise while listening to mixed messaging in economic news coverage can be confusing—and stressful. Many Americans have been hit hard by the current economy and are looking for answers.
That’s why Nuvision hosted local economics expert and UCLA Anderson School of Management professor Jerry Nickelsburg for a Facebook webinar on April 20th. He discussed the state of our economy, broke down the data, and answered member questions.
Here are the key points members took away from Nickelsburg's presentation:
- Supply chain problems are driving inflation. In the past, spikes in inflation have been triggered by supply chain problems. This was the case after WW2 and the Korean War. The economy was oriented towards war manufacturing and couldn’t respond immediately to the domestic shift in demand. Today, inflation is highest in areas with supply difficulties, like vehicles, used vehicles, shelter, energy, and food. The war in Ukraine impacts energy and food, while the pandemic has impacted the ability to transport materials for other items. Oil producers also stopped investing in oil rigs at beginning of the pandemic, so it will take time for new supply to hit the market.
- The Federal Reserve has started raising interest rates in an attempt to cool the economy. The Fed focuses primarily on two areas: employment and inflation. While employment is stabilizing, inflation is increasing. Prices went up 8% last month.
- Demographics are an important reason home prices are not expected to fall. A wave of new homebuyers is on the horizon and already hitting the market. Millennials, who have waited longer to start families, are now looking to settle down and purchase homes. Yet homes have been underbuilt for years, meaning supply will continue to lag behind demand. New construction projects also face challenges due to supply chain constraints and labor shortages. While high interest rates could eventually decrease the rate of appreciation, which has been dramatic, it is unlikely they will reduce prices with the current level of demand.
- Job gains and losses vary between sectors. Industries like tech and distribution are growing. Others, like personal care, education, leisure, and hospitality—industries that require a high degree of human contact—are experiencing losses. These are important sectors that employ many people.
Let us help you navigate confusing economic times.
Our goal is to provide resources that help you understand what is going on, where things are heading, and the steps you can take to ensure your success. This economics webinar is just one way of doing that.
We also encourage you to watch the full webinar here to gain a more in-depth understanding and hear answers to other member questions, such as:
- What’s causing the drop in the growth of consumer spending?
- How will this economy impact mortgage rates?
- What are the chances of new vehicles and old resales decreasing in cost? Or will vehicle prices continue to rise?
- What impact does the fed printing money have on inflation?
- Are we seeing another bubble?
Watch the webinar on our YouTube page.