MANCHESTER — Businesses should build up their cash reserves to help weather a “mild downturn” predicted in the U.S. economy this year, an economist said Wednesday.
But Catherine Putney of ITR Economics of Manchester produced groans from a lunchtime audience when making a more dire prediction.
“ITR does mention that 2030, will be a pretty — I don’t want to say apocalyptic — but another Great Depression in the United States,” Putney told 160 people attending a Greater Manchester Chamber of Commerce luncheon at the Puritan Backroom Conference Room.
In the short-term, the second half of 2020 should produce some optimism, but it will be 2021 “when you should feel good,” Putney said.
In her firm’s long-term view, Putney cited inflation in health care spending and a Social Security system under greater financial stress as reasons for the 2030 prediction.
Putney invoked actor Bruce Willis in the movie “Armageddon” in which there comes a drop-dead time in the movie to blow up a threatening asteroid before it is guaranteed on striking earth.
“Once it crosses a certain threshold, there’s no turning back,” she said of addressing the upcoming financial burdens facing the country.
Putney said it’s “very unlikely” that officeholders in the next five years will do what’s required to avert this predicted depression — raise taxes to shore up Social Security.
Chamber CEO Mike Skelton asked if there were any presidential candidates in the room.
Putney said business sectors could feel the downturn at different times, saying construction, for example, often lags the broader economy.
She urged businesses to concentrate on more profitable business segments and to focus on their websites with so many people researching and shopping on their iPhones.
“Really honing in on your website will keep you on top of your competitors,” Putney said.
She also suggested training employees to learn more tasks “in case you have to let go” of some workers.
Regarding rising tariffs on Chinese and American goods, she said China exports represent more than three times the percentage of its gross domestic product than they do for the United States.
“The trade wars don’t help either side,” Putney said.
Skelton said business people in the audience should listen to Putney to see what it “could mean for your business.”
Jeremy Lindquist, CEO of Sky Peak Financial, a financial planning services firm in Manchester, said it was helpful in hearing from another source on “where the economy is heading” and getting a “helpful reminder” of various key indicators to look for to predict the economy’s future course.