In 2024, there was a slower rate of inflation, continued low unemployment and no recession. What’s ahead economically in 2025?
WOSU's Debbie Holmes talked with Bill LaFayette, an economist and founder of the consulting firm Regionomics.
Debbie Holmes: What trends do you see developing in the new year and how much growth do you see in 2025?
Bill LaFayette: Well, for the fourth consecutive year, it looks like central Ohio will have employment growth that's less than the national average. I'm predicting 4,500 new jobs in our 1.1 million job economy.
Debbie Holmes: And why is that?
Bill LaFayette: The chief problem’s been workforce. We have people entering the workforce at a fairly good rate, but they're not being hired, and they're not being hired most likely because they don't have the skills that employers need right now.
Debbie Holmes: What are those skills?
Bill LaFayette: The skills are both technical skills and what I call "work ready" skills (such as) leadership, communication, teamwork, skills like that.
Debbie Holmes: But there are some industries doing very well.
Bill LaFayette: Construction is doing well. Health care is doing well. Again, we have no idea how much better they would be doing if there were enough nurses, if there were enough construction workers and so forth.
Debbie Holmes: Ohio's unemployment rate did climb last year to 4.3% in November. The previous year, in 2023, it was at 3.6%. So, what does this tell us?
Bill LaFayette: What it tells us is that people are coming into the labor force, but they're not finding jobs to the same extent that they were last year. The same thing is going on here in central Ohio. The number of people actively looking for jobs here in central Ohio was 30% higher in 2024 than it was in 2023.
Debbie Holmes: What are your concerns, if any, about a second Trump administration taking the reins on the 20th of this month? They're talking about raising tariffs.
Bill LaFayette: I worry about that a lot. We have no idea what those tariffs will look like and when they'll hit, if they'll hit, and if it's just a negotiating tactic, which it might have been. But tariffs, to the extent that the Trump administration's been proposing, would be extremely harmful for the economy and for the ability of households to afford basic goods like clothing, for example.
Debbie Holmes: Talk to me about last time that Trump was president, because he had raised tariffs then on agricultural products.
Bill LaFayette: Yes and when Trump raised tariffs on agricultural products, particularly soybeans, to China, they were able to source soybeans from South American countries. And our exports of soybeans plummeted. That was an extreme problem for Ohio agriculture and for the Ohio economy generally. If that happens again, Ohio will probably be negatively affected much more than other states would be.
Debbie Holmes: What about inflation?
Bill LaFayette: If there are tariffs, we’ll see a one-time jump in prices. The last time this happened, washing machines, I believe the price increased 25 or 30%, but that was a one-time jump. Inflation technically is a sustained increase in prices. The imposition of tariffs won’t cause that. But that means that a washing machine, say, would be a lot less affordable for households than it was before, which would have obviously negative effects on growth and production.
Debbie Holmes: How can people prepare for this year?
Bill LaFayette: Well, first of all, if you're looking for work and you can't find it, you could go to the one-stop job center (Ohio Means Jobs Columbus-Franklin County) on East Broad Street, and connect yourself with training for in-demand jobs. You can broaden your job search; maybe think more broadly about the skills that you have and think about industries that maybe you haven't considered before. What people are doing is stockpiling goods that they think might become more expensive in the new year. I'm not sure that that's necessary right now.
Debbie Holmes: What kind of products are you talking about?
Bill LaFayette: Things like clothing and washing machines and goods that come primarily from foreign countries that could be affected by tariffs.
