Gas, Retirements Affect Short Term, Long Term Economy
A state economist says for the most part, the economic recovery will speed up a bit with lower energy prices.
Scott Hodek says the the price of gas is about half of what it was just two years ago. He says when drivers look at the numbers on the gas pump, it can provide a psychological impact, either positive or negative, to consumers...
".....so not only do they have an outside psychological impact, energy prices in general have a huge impact on the economy. For consumers, if you're paying $20 to fill up your tank vs. $40, then you're feeling a little wealthier and you can take that money on something else...."
Hodek says that is true also for businesses, whose costs drop and they have more money for employment or operations.
Hodek says gas prices are just a piece of the puzzle. Overall, the national economy continues a slow improvement which Hodek thinks will continue through 2015, barring some shock to the system.
Hodek says another longer term concern is the possibility of a labor shortage could happen as more Baby Boomers leave the workforce.
State economist Scott Hodek says as the Boomers slowly leave the workforce, fewer people will be there to replace them. He says that will statistically show up as lower unemployment. He says the explosive growth of the economy in the 1990's was caused by the creation of jobs. This time around it will be another factor..
"....it will be in a way like the 1990's when the (unemployment) rates were really low because there were a lot more jobs than people. In this case it will be somewhat similar only mostly because of a basic warm body shortage...."
Roughly 17 percent of baby boomers now report that they are retired, up from 10 percent in 2010.