The consumer-driven U.S. economy is strong despite a housing shortage and a “big question mark” around tariffs under the incoming Trump presidency, according to a regional expert.
“All in all, we’re starting 2025 in a really good, strong spot,” Kenneth J. Entenmann, chief investment officer and chief economist at NBT Wealth Management, said at Thursday’s Eggs & Issues forum organized by the Portland Regional Chamber of Commerce. The talk was on the campus of the University of Southern Maine.
Economic growth over the past six or seven quarters, fueled by consumer spending, has been “surprising,” he said, ensuring a so-called soft landing without falling into a recession as had been repeatedly feared.
“We’ve had this ‘Waiting for Godot’ recession for the last three years,” he said, urging the audience to “ignore all those talking heads out there” with the reassurance that the economy is doing pretty well.
“Yes, we’ve achieved a soft landing,” he said, adding that he doesn’t believe that inflation will cause a recession.
“I think we’re going to be steady as she goes for 2025.”
However, housing remains a hurdle given a nationwide shortage of some five million units, while “sticky” inflation will frustrate hopes for a significant decline in interest rates.
Housing is “a real challenge and will take a while to fix,” he warned.
Tariff uncertainty
On the political front, Entenmann said that while the Trump administration could reduce some business regulations, “tariffs are the big uncertainty and the big question mark.”
However, he noted that it remains to be seen whether Trump’s tariff threats are just that or will actually come to fruition.
And while he hopes that the threats are just a trade negotiation tactic, he warned that if tariffs do come they “could prove to be inflationary.”
NBT Wealth Management is a division of Norwich, N.Y.-based NBT Bank, which has offices in Maine, New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Connecticut.
