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AGENCY TESTIMONY
Current economic challenges and risks
5:11:19
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94 sec
Jiha outlines the current economic challenges and risks facing the city, emphasizing that despite improvements, there are still concerns for the future. He highlights various economic indicators and potential issues.
- Signs of economic weakness, including slowdown in GDP and job growth
- Inflation remains above the Federal Reserve's target rate
- High commercial office vacancies expected to continue throughout the financial plan
- Geopolitical events and potential supply chain disruptions pose risks to the world economy
- April tax collections are about $200 million below expectations, driven by growth in personal income tax refunds
Jacques Jiha
5:11:19
Before I conclude, it is important to reiterate that we are not out of the woods just yet.
5:11:28
The economy is showing signs of weakness.
5:11:32
We are already seeing a slowdown in GDP and job growth.
5:11:38
Economic growth slowed to 1.6% in the Q1, and national employment growth has also decelerated to about 175,000 jobs in April from a monthly average of 250,000 in 2023.
5:11:56
Similarly, the city employment picture has slowed with the city losing a 1,000 jobs in April.
5:12:05
Also, inflation remains stubbornly above the Fed's target rate of 2%.
5:12:12
Federal Reserve interest rate policies are likely to remain unchanged in the near term, which will continue to negatively impact residential real estate markets.
5:12:23
While commercial office vacancies are expected to peak this year, they are projected to be high throughout the financial plan.
5:12:32
These factors will likely limit property tax revenue growth going forward, which is the city's single largest source of tax revenue.
5:12:45
Geopolitical events and potential supply chain disruptions also remain a major risk to the world economy.