FORT WAYNE — Two economic forecasts sponsored by banks and held in Fort Wayne this week had similar outlooks on the chance of a recession in the U.S. economy as well as similar views on the effects of artificial intelligence on jobs.
PNC event
Gus Faucher, PNC’s senior chief economist, spoke Nov. 5 to 165 PNC clients and members of the Financial Executives International Fort Wayne Chapter. PNC also invited students of the new Finance Lab Powered by PNC at the Doermer School of Business at Purdue Fort Wayne. The event was closed to media, but Faucher spoke to Greater Fort Wayne Business Weekly after it.
“My message was the economy continues to expand in late 2025” but tariffs are creating some drag, Fraucher said. Interest rates are high and unemployment is increasing, but no recession is in sight, he said. The economy continues to have strong growth.
The combination of the longest government shutdown in history and high tariffs is causing concern.
“There’s a lot more policy uncertain than in a long time,” Faucher said.
Small businesses feel a sense of uncertainty.
Attendees of the event had questions on the effect of low immigration on the labor force and the effects of artificial intelligence on jobs, Faucher said.
“AI holds tremendous potential for higher living conditions,” Faucher said, but it will cause job losses.
The Fort Wayne area has a strong manufacturing base, but its economy is diversified, including aerospace and business services sectors.
“That will be a key driver” to economic success, he said. Logistics is another key driver, as Fort Wayne is centrally located among Chicago; Columbus, Ohio; and other points.
The region has been putting an emphasis on skilled trades for students as an alternative to a four-year college degree to meet the needs of companies for workers. Some economists say the college degree will
Faucher sees a need for both, but AI will definitely impact learning.
“We need skilled workers wether in trades or certificates but we need college graduates,” Fraucher said.
With AI likely to have major changes on the workforce in the next 15 years, what workers will need to be is lifelong learners to keep up with the changes.
“So they need to have longer-term skills: communication and how to think,” he said. “Students need to be flexible. I think we’ll have new skills and some that will no longer be relevant.”
STAR economic outlook
Edmond J. Seifried, co-chairman emeritus at Seifried & Brew, which provides bank analytics, municipal analytics and economics for the community bank industry, spoke Nov. 6 at Fort Wayne-based STAR Financial Bank’s 24th annual economic forum.
“It’s clear that AI is going to lay off workers,” Seifried said. Amazon cut 14,000 white-color jobs; United Parcel Service has reduced its management workforce by 48,000 since 2023 and Target is cutting 1,800 jobs, he said.
“Should you be for or against AI with respect to job losses?” he asked.
AI isn’t the end of civilization just like Marx was wrong about technology in his day — locomotives, cars, electricity — resulting in the unemployed rising up and killing off the rich and taking over the economy like in Russia, Seifried said.
Technological advances are occurring faster, he said. Electricity took about 30 years to go from a novelty to being ubiquitous. The number of passenger cars exploded after about 20 years while “iPhones were everywhere in 3 years,” he said.”So the innovation time is shrinking, but the innovations continue. Now why should you be against all those people who are against AI? Here’s why. … Innovation does not kill capitalism.”
In 1950, the unemployment rate was 4.3%. “Guess what the unemployment rate is in America today — 4.3%,” Seifried said. “What these critics get wrong is the innovation itself creates millions of new jobs.”
While figures for production and business activity aren’t being released for October due to the government shutdown, Seifried filled in other numbers for the third quarter. One of those is the Institute for Supply Management’s manufacturing index, which for October was 48.7. That gives an indication, based on the past, of a 1.8% growth rate in the next year. “So if you’re a business person and you’re wondering what your sales are going to be next year: 2%.”
Seifried, who is involved in wage arbitration cases, recommended that attendees budget a 3% increase for their employees’ wages in 2026.
That’s because of inflation. Food overall went up 3% in the last year, with food at home, increasing by 2.7%, being a better options than eating out, Seifried noted. Rental costs, at 3.7%, are still above inflation. “Everything is interconnected in this country. One of the big movements we’ve seen in 2025 is 2 million immigrants … they left the country.” People are predicting the 3.7% figure to go very low with the loss of many renters, he said. It will take a while, however, due to leases needing to expire. “Citizens or not, we expect this number to drop,” he said.
Some items are cheaper today than a year ago, gasoline being one of them, Seifried said. Gasoline has been over $3 a gallon this year.
Seifried touched on the animosity that President Donald Trump has for Fed Reserve Chairman Jerome Powell, the latter of whom said the president’s tariffs raised prices and weakened the economy. However, Seifried supported the Supreme Court’s decision in May that said while the president could fire the heads of federal agencies, they protected the Fed.
“Has tariffs impacted inflation? The answer is yes, but not by as much as you think.”
The favorite inflation gauge, the PCE (personal consumption expenditure index), has risen from 2.4% in March to 2.7% in August, but it doesn’t appear that tariffs had made things disastrous, he said.
The Fed made no changes to the interest rate in its first three meetings of the year. In September, it cut the interest rates from 4.25%-4.50% to 4.00%-4.25%. At the end of October it lowered it to 3.75% to 4%.
The Fed is schedule to next meet Dec. 9.