Economist sees more of ‘best economy everybody loves to hate’

RSM Analyst Kevin DePew delivered a surprisingly positive message today at the Quad Cities Chamber 2025 Economic Forecast. He told Quad Cities business leaders to expect more of what he calls “the best economy everybody loves to hate.”  Bill Polley, the chamber’s director of business development, was equally blunt when asked to summarize his regional forecast […]

RSM Analyst Kevin DePew delivered a surprisingly positive message today at the Quad Cities Chamber 2025 Economic Forecast. He told Quad Cities business leaders to expect more of what he calls “the best economy everybody loves to hate.” 

Bill Polley, the chamber’s director of business development, was equally blunt when asked to summarize his regional forecast for a large crowd gathered Friday, Dec. 6. at Rhythm City Casino, Davenport. He predicted 2025 also will be “better than 2024” for the six-county Quad Cities region. Mr. DePew is the deputy chief economist and Industry Eminence Program leader of RSM, a global network of experts who offers services, including tax, consulting, audit and orecasting.  The forecast he shared for 2025 is the rosiest he’s delivered in recent years, and he also acknowledged that it’s hard to convince other economic forecasters of that fact.  “Since March 16, 2022, there’s been somebody on television wearing a suit like me – on financial television, or on global television – telling you that if we’re not in a recession right now, we’re going to be in a recession in the next six to 10 months,” Mr. DePew said. “So it’s a long period of being on the lookout for the next shoe to drop, for the next recession.” There are ample signs that reflect that it won’t come in 2025.  For example, the speakers said, the U.S. economy continues to outperform predictions, with GDP growth coming in at about 3%. “To put that into perspective, from 1945 to 2007 the average GDP growth pace was 2.5%,” Mr. DePew said. By contrast, the Great Recession was so severe it took the 1945 to 2009 growth rate down to 1.5%. 

Economy under repair

That and other data indicate, he said, that “over the last 14 years or so, since the Great Recession, we have started to repair the U.S. economy.” That doesn’t mean there are no potential potholes ahead. For example, the incoming Trump administration is expected to support growth but it also could bring more risk to the upside of inflation if tariffs bring more risk, particularly if they spark a trade war and results in “tit-for-tat retaliatory measures,” Mr. DePew said. He added, however, that “nobody really has an insight into what those retaliatory measures might be at this point.” At the same time, other key measures of economic health are expected to be better than Mr. DePew said he’s seen in more than a decade. That includes rising productivity which enables businesses to protect margins and maintain higher wages that we’re seeing in the economy. In fact, RSM also is forecasting the lowest probability recessionary outcome in 2025. “We just do not see any kind of recipe for internal factors alone to be sufficient to bring the economy down,” Mr. DePew added. So why do fears of recession continue to dominate the conversation? “Over the last 20 years, we’ve trained ourselves to think ‘OK, we have to prepare for the next recession because look at our experience,’” he said.  If economic growth continues as expected, however, “Americans will have to train themselves to understand” that they can have an economy that supports higher rates, full employment and higher wages “without it being something that is indicative of a problem or structural issue with the economy,” Mr. DePew said.

Local leaders optimistic

Locally and regionally, Mr. Polley also highlighted positive trends and data that suggest that the Quad Cities economy will continue to improve in 2025 – with one caveat. He cautioned that tariffs at the national level could impact the Quad Cities’ heavy industrial base if they make local products more expensive than the ones available in the rest of the world. “Why does that matter?” Mr. Polley asked. Because 32% of the GDP of the Quad Cities is export-related. “That’s an incredible number. There aren’t many cities our size, or any size in the country that can say that.” Consider for example, a 2023 export value report which ranked 148 U.S. metro areas. The Quad Cities ranked 57th on that list. That puts the region “right up there with communities like Virginia Beach and Norfolk, Virginia. “We’re above our weight when it comes to exports,” he said. It is, however, a double-edged sword since import tariffs at the national level “are going to have a disproportionate impact on the Quad Cities.” Barring those problems, however, Mr. Polley anticipates a better 2025. So do local business leaders who told the chamber in its latest survey that they are optimistic about the future in 2025.