An economic recession is further away than the public may believe, according to two executives from Commerce Trust Company.

Scott Colbert and Don McArthur presented the company’s national economic predictions for 2020 at an annual investment summit Wednesday at the Country Club of Missouri.

Around 150 investors, business owners and other members of the mid-Missouri community attended the event, which included speeches on issues such as interest rates, the 2020 election, U.S.-China trade disputes and the possibility of a future recession.

Unlike many economists, Colbert, the company’s chief economist, isn’t predicting a recession on the immediate horizon.

The U.S. has experienced nearly 11 years of overall growth since the last recession, Colbert said during a presentation at the summit. While economic predictions can be tricky, he doesn’t think that growth will stop now. Instead, Colbert offered the audience a more optimistic view about the year to come.

“We think the recession is much further away than the media consensus,” Colbert said. “We’ve been suggesting that the economy has a long runway, and that that runway probably ends in 2023.”

Colbert and his peers at Commerce Trust Company drew this conclusion by comparing recovery since the 2008-09 recession with recoveries from pre-2008 recessions. Economic recovery includes an increase in a country’s gross domestic product. The U.S. is experiencing its longest economic expansion in history. But this growth is occurring at a lower and slower rate than any previous expansion, leading Colbert to believe growth can continue throughout 2020.

Unemployment remains low, and businesses are still hiring as well. This is a sign of an economy that still has room to grow, Colbert said.

“You don’t have a recession when the economy and consumers are getting jobs, growing their paychecks and paying their bills,” he said.

Colbert also pointed to lower interest rates as a sign of a healthy economy. In 2019, the Federal Reserve lowered interest rates three times. The federal funds rate, which determines the cost of borrowing, now sits somewhere between 1.5% and 1.75%, according to the Fed.

“When the Fed has historically cut rates, (the rates) tend to stay lower longer than you expect,” Colbert said.

Lower interest rates, like the ones the U.S. is currently experiencing, are good for everyone who wants to borrow money. Lower interest rates typically mean more borrowing, more spending and more money pushed into the economy, Colbert said.

One factor that may play a role in the year’s economic development is the upcoming presidential election, according to multiple speakers at Wednesday’s summit.

Colbert called the election a “wild card” that has the potential to affect the economy by decreasing consumer confidence and introducing uncertainty into the public sphere.

Election years have, historically speaking, brought ups and downs to the economy in tandem with the election cycle, according to a presentation given by McArthur, Colbert’s co-presenter and Commerce Trust Company’s researcher and senior investment strategist.

“The market likes certainty,” McArthur said.

As citizens become more unsure of who the next president will be earlier in the election cycle, the economy dips. As those uncertainties are smoothed over, such as after the primaries and Election Day, those dips are corrected as consumer confidence grows, according to the presentation.

In addition to the upcoming election, consumer confidence has also been shaken by changing tariffs between the U.S. and China in the past two years.

President Donald Trump recently announced “phase one” trade agreements with China, potentially marking the end of trade disputes that have particularly affected rural America in recent months. Colbert thinks these agreements will stick.

The trade war and domestic politics had less of an impact on the U.S. economy than most believed, according to information from the company. Referring to the U.S. as China’s “biggest customer,” Colbert reaffirmed he saw China as having more to lose from trade disputes.

Overall, Colbert presented a much more optimistic view of the year to come than many of his economic counterparts. He and his associates still see room for economic growth and continue to predict a recession-free 2020 based on their own aggregate data analysis.

Supervising editor is Kaleigh Feldkamp.

  • Public Health and Safety reporter, spring 2020 Studying science, health and environmental journalism Reach me at, or in the newsroom at 882-5700.

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