Economist, consultant and author Brian Beaulieu provides insight during a 2024 MMAC event.
Q&A with economist Brian Beaulieu
Brian Beaulieu, Consulting Principal and Chief Economist at ITR Economics – has provided his expert insight to hundreds of thousands of business owners and executives over the past 40 years – helping them navigate the economy’s often choppy waters.
Once again, he will provide his thoughts on the current state of the economy and what to expect moving forward in 2025 during MMAC’s Align Resources for the Rise Ahead with Brian Beaulieu event on March 5.
Before his visit, Beaulieu was gracious to take part in a brief Q&A.
Q. What are the data points you’re most interested in as we move further into 2025?
A. Prices are high on the list. Tariff and immigration policies have the potential to add more fuel to the next cycle of inflation that we are forecasting. Additionally, budget deficits are projected to rise. This leads to fiscal inflation. While ITR Economics already had this in the forecast, we need to see how much the bond market reacts to the probability of fiscal inflation. The market’s response will most easily be discerned via the U.S. Government 10-Year Bond Yield.
Q. What are your projections for the U.S. GDP growth in 2025, and what key factors will drive this growth?
A. GDP growth in 2025 is projected to be slightly milder than what we experienced in 2024. Expect the second half of the year to be stronger than the first half. The US economy’s natural status is growth. Growth can be disrupted by imbalances within the economic system or by external influences such as war, government, health crises, etc. ITR Economics does not forecast pandemics. Regarding the other factors, we do not see any threats large enough to preclude growth. After-tax incomes are rising and retail sales are growing at a normal pace. Both are markers for an economy that will grow.
Q. Do you foresee inflation softening in 2025, and what impact will it have on consumer spending and business investment?
A. We do not see inflation softening in 2025. On the contrary, there are already signs that inflation is essentially at the low point for this business cycle. The renewed ascent in the Producer Price Index and the threat of higher food prices and labor costs will broaden the inflationary pressures within the economy.
Q. What trends do you foresee in the U.S. labor market in 2025 in terms of employment rates and wage growth?
A. Wage growth in 2025 will likely moderate slightly in 2025 versus 2024 because the CPI is lower than it was last year. However, unemployment remains low and labor participation rates are high. There is no pool of labor poised to ameliorate the demand for labor in the U.S. Expect wages to rise through the remainder of this decade.
Q. How will global trade dynamics, including relations with major trading partners like China and the EU, influence the U.S. economy in 2025?
A. The imposition of tariffs, while touted as being good for the domestic economy, will be a drag on U.S. growth and another source of future inflation.
