“The economy is doing much better than most people think it is,” said Michael Skordeles, head of U.S. economics for Truist.
Skordeles was the keynote speaker Tuesday at the “Sizing up 2025 Lehigh Valley Economic Outlook” put on by the Greater Lehigh Valley Chamber of Commerce in Bethlehem.
While the economy has normalized after the rebound it experienced post pandemic, he said consumer spending remains strong and while inflation is certainly a problem, currently, wage growth is keeping people spending.
One area where the region and the nation face stiff challenges is in the housing industry. Higher mortgage rates have made housing less affordable. He said homes are on average more than 40% more expensive than they were right before the pandemic.
Construction of new housing has also gone up and could get worse if certain tariffs are enacted or expanded.
But he cautioned attendees not to get too worked up over the thought of increasing tariffs, while he said he believes some will be enacted, he doesn’t believe some of the more sweeping proposals will be enacted. Instead, he said it is more likely there will be more targeted tariffs on products that make more sense.
He gave the example of the fall of Bethlehem Steel, illustrated by the abandoned structures behind him at Steel Stacks where the event was held.
He said tariffs on products like steel and aluminum can help keep such manufacturing in the U.S. because foreign imports won’t be as affordable.