St Mary's University
- Belinda Román teaches economics at a little-known university in San Antonio, Texas.
- She nailed her forecasts for 2023, at a time when much of Wall Street was predicting a recession.
- Román told BI that she's still bullish about the economy — but keeping an eye on the 2024 election.
At the start of 2023, most US economists were bracing for a recession.
They predicted a combination of red-hot inflation and sky-high interest rates would stifle growth and drive up unemployment.
An economics professor at St Mary’s University, a tiny Roman Catholic college in San Antonio, Texas, bucked the trend.
Last January, Belinda Román told surveyors from The Wall Street Journal that she was expecting the economy to have a strong 2023. She ended up nailing that call.
Román spoke to Business Insider about why she was more bullish on the American economy than most of Wall Street’s top banks — and shared her predictions for 2024.
No recession, low unemployment
In January 2023, Román locked in her forecast for the year, telling the WSJ that she was expecting the US’s Gross Domestic Product (GDP) to expand by 2.8%.
That was a significantly higher number than what most of the nation’s economists were predicting. Both Bank of America and JPMorgan had warned it was time to brace for a recession — typically defined as two successive quarters of economic contraction — while even some of Wall Street’s most optimistic voices were still forecasting a slowdown.
Román has been proven right since then. The Commerce Department estimates that GDP rose 3.1% last year, thanks to cooling inflation and resilient consumer spending. That's been demonstrated by Americans’ willingness to spend big on travel, live sports, and Taylor Swift concerts.
“I went back and looked at what I saw historically was typical for the US economy when it’s coming out of a shock, and tried to recalibrate my thinking,” Román, who’s taught at St Mary’s for the past 13 years, told BI in a recent interview.
“Covid-19 was significant, but it wasn’t as long term in duration as some of the other events that we’ve been through, so that’s how I started to adjust my numbers,” she added.
“I didn’t really go back and tinker with my forecast — I just kept going, based on what I thought was going to be the outcome.”
Román also nailed her start-of-2023 inflation, unemployment, and interest rate predictions. That meant she ended up topping the Journal’s ranking of 71 forecasters for last year, finishing ahead of well-known economists including Goldman Sachs’ Jan Hatzius.
She told BI that her long and varied path into teaching — starting out as a pre-med student before stints in the House of Representatives and at the American Chamber of Commerce in London — had helped her to look at the US economy in a different light.
“I didn’t come back to academia until I’d finished all my private sector and NGO sector work, so I brought that experience with me, and I think that helps when I’m doing these types of forecasts,” Román said.
2024 predictions
Many forecasters are now bullish on the US economy off the back of a stellar 2023 — and Román is no exception.
She told BI she’s expecting growth to dip slightly, to around 2.6%, but remain well clear of a level where Americans have to start worrying about a potential recession.
“There’s still growth, and there’s still some positive momentum, but there’s also a sense of softening,” Román said.
The labor market has carried on going from strength to strength in recent months, but inflation has remained stubbornly above the Federal Reserve’s 2% target, and some on Wall Street are warning that growth could finally start slowing this year.
The 2024 presidential election in November is one potential speed bump that makes it harder to call which direction the economy will go this year, Román added.
“The political environment is a challenge because it’s very charged with a lot of rhetoric,” she told BI.
“I very much think from the ground up — if whichever way the presidential coattails swing brings in significant changes at the lower levels, then we might see a significant change in economic activity.”