The Atlanta Commercial Board of REALTORS® seminar, "Economic Forecast," focused on large scale economic indicators with an analysis of the market at the present and into the next year. The presentation was given by Dr. Roger Tutterow, Professor of Economics at Kennesaw State University. He discussed trends related to the leading economic indicators, the effect of 10-year Treasury bonds, industrial production and manufacturing, and the effect of the prevailing political bifurcation causing divergent consumer sentiment and satisfaction.
The U.S. currently has over nine years of economic expansion, and the office sector is in its fourth year of recovery, leaving many feeling doubt of how long this growth will continue. However, Dr. Tutterow offered that recessions don’t occur because of “old age,” but rather, because of key unsustainable weaknesses. In considering the fundamentals of the economy, he offered a consideration of the GDP, which is a measure of production, not sales activity with which it is commonly associated. The top-line GDP figures for the first quarters of 2017 show some volatility, but after inventory numbers are backed out, growth in Q1 for GDP was 2.7 and Q2 was 2.9, showing more consistency. He opined that the economy is strong in ways that tend to resist retraction, and he expects that the national economic growth will end the year at a pace of around 3%.
Dr. Tutterow observed that manufacturing is making a comeback in the U.S., and the principle drivers are energy and labor costs. Due to factor price equalization, where the prices of identical cost factors are equalized over time across trading partners, the U.S. is becoming more competitive as wages increase across Asia faster than domestically. Nevertheless, international sales remain difficult for U.S. companies when foreign manufacturing and agriculture remain below U.S. price points, and a strong dollar pushes the price up in international markets. However, the strong dollar makes imports cheaper for U.S. consumers.
An aggregate measure of 10 key economic measures called the Leading Economic Indicators Index has traditionally turned negative before a recession. Considering this index, Dr. Tutterow considers the likelihood of a recession low for the coming year.
Our thanks to the Education Committee, chaired by Jeff Pollack and Dale Lewis, and to Dr. Tutterow for a compelling presentation and a thought provoking discussion.
Roger Tutterow is Professor of Economics at Kennesaw State University. He also serves as Director
of the Econometric Center, an applied research center housed in KSU’s Coles College of Business.
His analysis of the economic, business and political environments have been featured in a variety
of media including Wall Street Journal, Financial Times, USA Today, Atlanta Journal Constitution,
Arizona Republic, Florida Times-Union, Kansas City Star, Los Angeles Times, New York Times,
Orlando Sentinel, Palm Beach Post, Wichita Eagle and on CNN, CNBC, NBC, Bloomberg Television,
NPR’s “Marketplace” and “All Things Considered,” CNN-Radio as well as by regional electronic and
In addition to his work in academia, Dr. Tutterow has served as a consultant on financial
economics and statistical modeling for corporate clients ranging from Fortune 500 companies to
closely held businesses. He also serves as Chief Economic Advisor for the Henssler Financial Group,
an Atlanta-based investment advisory firm and as a strategic advisor to Georgia Oak Partners, an
Georgia-focused private equity firm. He has provided expert testimony on economic, financial and
statistical matters in state and federal court, before the Georgia General Assembly and before the
Georgia Public Service Commission. Dr. Tutterow has given several hundred speeches to
professional groups in over 30 states and Canada on topics in the economic, business and political