recession economy taylor swift

Economist predicts mild 2024 recession, hit Taylor/Travis song

Betsy PriceBusiness, Headlines

recession economy taylor swift

Economist Anirban Basu told a sold-out New Castle County Chamber luncheon there will be a mild recession in 2024, and a hit song from Taylor Swift about her romance with Travis Kelce.

A Baltimore economist known for his sense of humor left the punchline of his New Castle County Chamber of Commerce speech Tuesday to the last bit of his presentation:

“It will come nearly a year after I initially anticipated, but recession is coming in 2024,” Anirban Basu told the 200 people attending the chamber’s sold-out annual State of the Economy luncheon.

It will be mild, he said.

Basu cited a variety of reasons as underpinning for that prediction: Continued high interest rates; continued high federal debt; an inability of the Federal Reserve to lower interest rates; a lower number of mortgage applications; personal savings depleted by consumer spending; rising mortgage and credit card delinquencies; the lack of affordable housing; and an inversion in the 1-year and 10-year yields on treasury bonds.

“If I’m wrong about that, I’ll predict a recession for 2025,” he joked. “And I’m gonna keep predicting one until I get it right and then I will retire and then people will say, well, that Basu — he knew how to forecast the economy.”


Anirban Basu

A recession is likely to hit hardest the people who comprise the bottom 50% of America’s wealth, he said.

The top 10% — which controls 30% of the country’s wealth — and those between 51% and 90%, who control another chunk, are unlikely to be affected, Basu said.

The chair of the Maryland Economic Development Commission from 2014-2021, Basu admits he’s a pessimistic guy and looks for reasons to be pessimistic about the economy.

He likes to pick a theme for his talks, and this year focused on the Good, the Bad and the Ugly, referencing Clint Eastwood movies.

The prediction of a recession was his ugly.

But there was a lot of upside in 2023 into 2024, he said.

“On an annualized basis in the current quarter, there are very few signs of a slowing economy,” he said.

One major upside, he insisted, is the very public Taylor Swift-Travis Kelce romance.

“Is this thing between her and Travis Kelce not the greatest thing ever,” Basu asked, to some laughs. “I think it’s precisely what this nation needs in these troubled times. It’s fabulous.”

Pictures of them kissing on the internet “has the country aglow,” he said. “This is going to end well because they are a very handsome couple, I think we must agree on that, and they are going to produce one very beautiful number-one hit song. When that occurs, and it will occur, the music is going to flow and I for one cannot wait.

 The good:

  • “Nobody” saw the explosive 4.9% growth in the third-quarter of 2023, which helped push the year’s growth to an annualized 2.5%, “That is a far cry from a recession.”
  • Consumers were spending aggressively in the first quarter of 2024 on retail sales, capping off a year in which they continued to spend more of the savings they amassed during COVID-19.
  • That spending drove up the cost of things like travel and concert tickets (think Taylor Swift and Beyonce). “We just set a record for the most number of people to pass through TSA checkpoints.”
  • There’s 9 million job openings in the U.S., and the economy just added another 353,000. Basu said he expected that employers’ biggest problem may be attracting and keeping workers.
  • Union strikes and negotiations have raised wages for a lot of workers. Full-time UPS drivers soon will be earning about $170,000 in wages and benefits, he said. “I do not begrudge the UPS drive that level of compensation. These are special peoplke who could drive a fairly large vehicle, be able to park itm, life heavy objects weighing 70 pounds our more and pass a drug test. Most Americans cannot do all of those things.”
  • The number of jobs has grown in Wilmington in almost every category except information, manufacturing and leisure/hospitality.
  • Wilmington is lucky to be part of the Philadelphia metro area, which is ranked 11th in the country for employment growth. Growth tends to happen south, he said, and while Philly is expensive, it’s not as expensive as New York, and much less expensive in Wilmington,. At the same time, the Philly area is tied for 12 in unemployment rates.Consumer confidence seems to be rising, and more small businesses are expanding. In December, 8% of small businesses expanded, “the highest percentage we’ve seen in months.

The bad, including recession:

  • Studies show that savings have declines sharply since 2020.
  • While inflation is down to about 3% from a high of about 9.1%, most of it is because of the fall in the prices of food and energy.
  • The country’s core personal index, a measure of how consumers are spending, shows inflation to be about 1.9%, he said, which may indicate that the Federal Reserve managed to contain inflation by introducing rate increases. “by the way, there’s some young faces here younger … My suspicion is some of you are single. And I can tell you that .. if you’re in a nightclub, a bar, a restaurant .. and you say the words “core PCE deflator” enough times, you probably will not go home alone … Just something I learned in graduate school.”
  • Costs are up for travel, shipping, delivery, shelter and food. They’re not up as much as they had been, but today’s rise is based on the highs from the worst of inflation. “And that’s what has many Americans miserable, the high cost of living … Prices are increasing at the pace they were but when you’re starting at such a high threshold for pricing … That’s a pain point.”
  • While the federal debt continues to rise, it doesn’t have to be dealt with today, but it will have to be dealt with at some time.
  • As more new cars have become available, people are not buying as many used cars, and used car prices have come down.’
  • Office vacancies in downtowns are way down, but not so much in suburban areas. As people work from home and companies downsize, that means the people who own the buildings have less income. Many of the buildings cannot be turned into residential space because they’re not enough access or parking, or some other kind of issue. Building owners are started to give up and just hand keys over to the banks that hold their mortgages and wish them good luck.
  • One reason for the lack of affordable housing is that people sitting in properties instead of selling them often have low rates on their mortgages. Even if the value of their houses have risen dramatically, they can’t move without having to take on a much higher mortgage rate, so they’re waiting to see what happens next. 

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Basu believes it will be hard for the American public to continue spending as they have.

As cost rises and people deplete their savings, they turn to credit cards, he said.

Right now credit cards have high interest rates, partly because of federal rate increases.=

“One of the games that people play is, look, I got this big credit card balance. No problem. I’ll  just get another credit card,” he said. “I’ll transfer that balance over. I’ll pay that low introductory interest rate for a while. I’ll just keep doing that. No problem.

“Here’s what’s happening. Increasingly banks are saying no to credit card applications.”


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