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Catalyst Corporate | May 02, 2023
Tara Sinclair will bring a unique and fresh perspective to Catalyst Corporate’s Economic & Payments Forum this year. As a Treasury representative, she balances her academic rigor as a researcher and professional economist with her desire to contribute to the long-term health of the United States economy. Her research interests have focused on economic forecasting, labor market conditions, recessions and other macroeconomic developments around the world.
If her name sounds familiar, that is because Sinclair was originally scheduled to share her expert insight at last year’s Forum. Her career transition to the U.S. Treasury kept her from joining us in 2022, but in 2023 we are now fortunate to have her as the Deputy Assistant Secretary for Macroeconomics in the Office of Economic Policy at the Department of Treasury.
In response to current market uncertainties, quickly rising interest rates, and high inflation, it’s important to examine how the U.S. got to the position it’s in to better understand where it may be going.
“Compared to the long and slow recovery from the 2008 Financial Crisis, the U.S. recovery from the COVID-19 economic shock has been remarkable,” Sinclair said. The U.S. response to COVID can be simplified, she said, as a strong economic policy, alongside the virus-induced shutdown and consequent reopening.
In a recent publication co-authored by Sinclair and a colleague at the Treasury, they compared the post-COVID economic recovery of the G7 countries and found the U.S. recovered significantly faster than those that did not inject stimulus funds into the economy. “Faster output growth in the United States was initially accompanied by higher inflation, but inflation rates have been rising rapidly around the world… the United States saw substantial improvement in inflation, while European inflation continued to rise,” the report said. The U.S. Core CPI inflation rate has since decreased to less than all G7 countries except Japan.
In the labor market, the U.S. and Canada both experienced a spike in unemployment at the beginning of 2020, followed by a sudden plummet. Since then, Sinclair noted the labor force participation rate has slowly increased, a considerable number of jobs have been added and this period has been characterized by a phenomenon known as the “Great Resignation,” where some employees have left employment for more desirable and appealing positions.
“We also saw a much more inclusive recovery than we did from the Financial Crisis,” Sinclair said, in which the recovery only very slowly reached those in lower wage jobs. The most recent economic recovery, instead, has been experienced broadly, “across socioeconomic statuses, race, employees with disabilities, educational levels, criminal backgrounds and other factors. ”
Broad recovery is a good sign of long-term economic growth, one of the many areas of focus for U.S. Treasury Secretary Janet Yellen, according to Sinclair, and it’s important to consider when discussing economic health.
Though there have been areas of recovery across many different sectors in the U.S., Sinclair said, “these recoveries and improvements in the labor supply are what can grow the economy over the next decade.” Market conditions are improving, she said, employees are in positions they find more desirable, and there is more opportunity for people to participate in the workforce in positions they care about and where they can be more productive.
“When we consider the future economic outlook of the U.S., one of the major indicators of a healthy economy that we are currently seeing is a robust and thriving job market.” Especially in times of market uncertainty, Sinclair said that robust job market is a comforting indicator that both short-term and long-term economic conditions are improving.
Sinclair brings considerable expertise to the Economic & Payments Forum in areas that affect credit unions most. Keep an eye out for the latest Forum developments, including registration details. Plan to join us to hear from some of the best minds in the industry this September. More information can be found under Learning Center/Conferences on Catalyst Corporate’s website.