From Where I Sit...
By Bob Garrett, President & CEO
By Bob Garrett, President & CEO
For his 17th Annual Economic Forecast, Dr. Anirban Basu captivated a capacity crowd in the impressive Pardee Room of the Rusty Rail Brewery in Mifflinburg earlier this week with his up-to-the-minute economic report. After spending the best part of 40 minutes wowing the audience with his firm grasp of our current economy, he transitioned to his concluding slide.
The slide was titled: “Out of Time.” The slide’s subtitle read: Could the North American Economy Surprise to the Downside? At this point, everyone was leaning in for what came next.
Dr. Basu proposed the following five points:
1. Inflation is poised to stage a comeback—Blame tariffs;
2. Interest rates will be higher for longer—Blame tariffs;
3. Many consumers are now exhausted financially, and circumstances could worsen—right, Blame tariffs;
4. Asset prices are overextended—This has something to do with tariffs;
5. There will be growth in 2025, but there are risks including rising interest rates and falling asset prices, and that's because of—you guessed it, tariffs.
Here are the economic realities that Dr. Basu, came back to several times throughout his presentation:
United States
- Unemployment: Held steady at around 4.2% in May; weekly initial claims at approximately 245,000, which is a slight uptick over the four-week average.
- Labor Force Participation: Roughly 62.6%, with labor force near 170.7 million people.
- Housing Starts: May saw 1.26 million annualized starts—down 9.8% vs. April, lowest since May 2020.
- Building Permits: At 1.393 million, a 2% drop and weakest since mid 2020.
- Interest Rates:
- The Federal Reserve will likely hold its benchmark rate at 4.25–4.50% (but stay tuned).
- Average 30 year mortgage rates nationally are at around 6.84%, down slightly with a 15 year mortgage rate just under 6%.
Pennsylvania
- Unemployment: 3.9% in April—up 0.3 points year-over-year.
- House starts and permit applications mirror national declines, with multiunit and single-family permits down in April.
- Building Permits: Detailed county-level housing starts and building permits data is sparse, but we know that Snyder County had 46 units under construction last year. Interestingly, historical housing stock was easily available. For example, homes built prior to 1940, by county, are: Northumberland at 41.9%, Montour at 21.9%, Snyder at 22.4%, Union at 21.6%.
Summary
The national labor market remains steady but shows slight softening. Housing faces notable weakness: both starts and permits are at multiyear lows. Interest rates remain elevated, with mortgage rates around 6–7 %, keeping housing demand subdued. Pennsylvania’s economy largely follows these national trends with slightly lower unemployment. In our local counties, unemployment is mixed—Snyder and Montour are below 4%, while Union and Northumberland are currently above. Housing supply in older stock areas may cushion new construction demand, but lack of new permits signals muted local construction activity.
The national labor market remains steady but shows slight softening. Housing faces notable weakness: both starts and permits are at multiyear lows. Interest rates remain elevated, with mortgage rates around 6–7 %, keeping housing demand subdued. Pennsylvania’s economy largely follows these national trends with slightly lower unemployment. In our local counties, unemployment is mixed—Snyder and Montour are below 4%, while Union and Northumberland are currently above. Housing supply in older stock areas may cushion new construction demand, but lack of new permits signals muted local construction activity.
