Indiana Business Outlook Panel: Anderson

Outlook 2021: Anderson

The year 2020 has been unprecedented, and there are many unknowns heading into 2021. This virtual event is your chance to hear the perspectives of several of the state's leading economic thinkers as we all wonder what is in store for 2021.

12 pm on Tuesday, November 17

Faculty members from the IU Kelley School of Business and local panelists will offer forecasts and perspectives on the global, national, state and local economies, as well as the financial markets.

There will also be a Q&A session to answer attendee questions.

This event is sponsored by the Anderson Rotary Club

Description of the video:

Welcome fellow authoritarians. I'm Debbie Web. I'm with Ball State Public Media and also a member the Anderson Rotary Club. We are delighted that you could join us today either in person or online for the business outlook luncheon. The Kelly School has presented an annual business outlook forecast around the state since 1972. Based on research from its Indiana Business Research Center. The panel features faculty experts are experts rather from the Kelly School and IU plus a local panelists from Anderson university offering perspectives on the global, national, state, and local economies as well as the financial markets. It's my honor to introduce the moderator of today's economic forecasts. Dr. ID. Kasner. Id was appointed the Dean of the Kelly School of Business at Anderson University in July 2013. She is also the Frank the pop off Chair of strategic management. Dean Kasner joined the Kelly School faculty in 1995 and served in many leadership roles, including Associate Dean of Faculty and Research, Chair of the MBA program, and Chair of the Department of Management and Entrepreneurship. Her research focuses on corporate boards, executive succession and mergers and acquisitions. In addition to teaching more than 100 executive education classes, she has consulted with many national and international firms on management and board related issues. She currently serves on five boards. She has won dozens of teaching awards at the Kelly School and at the University of North Carolina, where she was a professor for 12 years. She was recently named School Dean of the Year by poets and quants, a leading business school media outlet. Dean Kitchener earned or MBA and PhD from the Kelly and her bachelor's degree in business administration from Southern Methodist University. And now for the business outlook panels assessment of the changing economic environment and its effect on business and economic policy decisions in the coming year, globally, nationally and statewide, in in and in Anderson, for our in-person gas, we will have a Q and a at the end, and we will collect the questions and submit them via chat. So now it's my pleasure. Hand off the program to Dr. Reznor who will introduce today's panelists. I want to welcome everyone and thank you for welcoming us today. Before I introduce our panelists, I just want to say a brief word about the Indiana Business Research Center or RB, RC. The IDRC as a center within the Kelly School of Business at Indiana University. The Kelly School just celebrated its centennial or 100th anniversary in the Ib. Rc has been a part of the school for nearly its entire history. Since 1925, the RB, RC has monitored socioeconomic trends as they relate to our state, the Midwest, and the nation. Idrc provides and interprets economic information needed by businesses, governments, and non-profit organizations. Within IDRC, we have. A variety of different services including stacks, Indiana, which is statistics for states, county cities, towns, townships, regions and census tracks and even much more. There's also stats America, a portal to us data supported by the US Economic Development Administration. Hoosiers by the numbers, which is workforce data, unleashing data for decision-making and Research, which is a partnership of state agencies and the Indiana Business Research Center to improve the quality and usability of state data. Indiana gateway, which provides information about house taxes and other public dollars are budgeted and spent by Indiana's local units of government. And the Center for Economic Model research, or c0 m r, which is provides quarterly economic forecasts for the United States, Indiana and the Indiana metropolitan areas. Ib RC also has a number of publications in contexts which provide substantive, easy to read articles about Indiana's Workforce and Economic published, excuse me, and the academy. It's published on a bimonthly basis. The Indiana Business Review, which is been, been issued since 1926. This publication provides analysis and insights on Indiana's economic and demographic issues. Indiana economic digest, which examines daily news from newspapers around the State focusing on hot topics. So you can see it. You can go to IDRC for so many resources regarding our state and the nation. Now let me introduce our panelists for today. We'll start off with Andrew butters. Dr. butters is assistant professor in Business, Economics and Public Policy Department at the Kelly School of Business at IU. Prior to joining Kali, he was an associate economist in the Economic Research Department at the Federal Reserve Bank of Chicago. He earned his BA from the University of North Carolina, Chapel Hill and his PhD from the Kellogg School of Management at Northwestern University. Dr. Kathy bouncer. Neil is an associate professor of finance at the Kelly School of Business. She received her Masters and PhD from the University of Chicago and in honors BA in Economics from IU. Her research interests focus on monetary policies and exchange rate behavior, international financial market liberalization and emerging stock markets. Prior to joining Kelly, she taught at the University of Washington, worked as an economist with the Federal Reserve Bank of Kansas City, worked at the SEC and was on the President's Council of Economic Advisers. Dr. Carl Anderson is a Clinical Assistant Professor of Business Economics at the Kelly School of Business in Indianapolis. He is Director of the Kelly's schools evening or part-time MBA program on the IEP you I Campus. His research focuses on pricing options and online markets. He has an MBA and a PhD from the Kelly School of Business in Bloomington. Doctor Anderson has seven years of work experience in the healthcare and heavy trucking industries. And last but certainly not least, is Lani Lee Berger. Dr. Lieber is associate professor of finance at Anderson University. He earned his MBA and DBA and finance from Anderson University and an undergraduate degree in Computer Information Technology from Purdue University. Now as they turn it over to Andrew, I want to remind our audience members who are online to submit your questions through the Q and a function below your screen. And anyone in person can submit their questions and those will be entered in the Q and a function. I'll turn it over to you, Andrew. Thank you for the warm welcome. I'm really excited. Blm or the business outlook is share and look forward to an engaging pound discussion today. So before I start giving my secondary affiliation with tears or Bank of Chicago, I need to provide just a quick initial disclaimer. The views that I express here today are my own and do not reflect the views of feathers or Bank of Chicago or the Federal Reserve system. Okay, so as charged with the US and international outlook, I'd be remiss not to start off by acknowledging the unprecedented forecasting environment economists, businesses and policy makers have faced over the last eight months and will continue to face over the near term. Since March of this year, we've seen unprecedented drops and then increases in economic activity indicators ranging from industrial production, payroll employment, to real personal consumption expenditures. These abrupt movements and economic activity reflect the response of businesses and households to the pandemic. Response to the pandemic from fiscal and monetary policy, including the cares act and Main Street lending program, were themselves unprecedented in many ways. These were combined with a set of public health orders, the likes of which we haven't seen. So this is all to say that the outlook provided today comes with a heavy dose of uncertainty attached to it. A theme I'll hit on more than once, I'm sure. So the International Monetary Fund is estimating that by the end of 2020, the global economy will have shrunk by 4.4%. Our group at the Indiana Business Research Center, or Ib, RC, is cautiously optimistic that our estimate of a 5% global recovery in 2021 will be just enough to erase the 20-20 Global drop in output. Turning to the outlook for the United States from April to June that year over year decline in US GDP was 9% that the client comes in at an annual rate of 31%. To put that in historical perspective, the largest contraction of the great recession came in the second quarter of 2009. The year over year decline and that recession was 3.9% or an annual rate of 8.4%. This unprecedented declining quality to this year was met with a rebound in quarter three. Advanced estimates have the annualized growth rate from quarter to quarter three at 33%. Despite this rebound from quarter to quarter three, the level of GDP in quarter three still constitutes a year over year decline of 2.9%. And in fact, we still have not returned to pre Coburn 19 levels of GDP in this country. Projections from the IVR see other professional forecasters, including the blue chip consensus forecasts released wait last week, as well as another forecasting model. But I've been a part of constructing referred to here in this slide is Alex. All indicate that production levels, returning to pre-coded levels are unlikely to happen until later in 2021. That said, the dispersion of projections both within and across these forecasting approaches is wide enough, excuse me, to suggest that returning to pre-coded levels has an uncertain time to turn to the international outlook. Next slide, please. At the Ib RC, we are hopeful that with this, this sustained fiscal and monetary stimulus, the Eurozone economy will rebound and that economic activity will increase by 5% in 2021. With that said, the Euro area is divided into two zones, the north and south and the north. Germany and the Netherlands have leverage to larger budget surpluses and a robust industrial structure to relatively speaking, mitigate the effects of the pandemic. Alternatively, in the South Spain, Portugal, Italy, and France, the effects of the pandemic had been more severe in terms of the economic outcomes, this reflects the combination of an initial fiscal situation that was more constrained and that these southern economies do rely more heavily on tourism. In China, we forecast GDP to expand by 2% in 2020. Thanks partly to China's manufacturing industry shifting production to address the global demand for medical products and other work from home equipment, we project that China's GDP will grow at a rate of 8% in 2021. The growth forecasts for emerging remark, excuse me, for emerging markets remains fragile. Many of these countries economies are exposed to several downside risks, including the continued progression of the pandemic reliance on exports including oil, and a less clear future trajectory of fiscal and monetary policies in total. Next slide, please. The world's economies, as well as the United States, are most likely infant overall decline in economic activity at year end for those countries and regions of the United States that are reliant on service providing activities like leisure and hospitality and business travel. The most recent data in near term outlook still remains gloomy. That said, absent another significant shock that contributes to economic headwinds. Many businesses, regions and countries should expect rebounds and economic activity through the next year. So now I'll pass it along to Kathy, who will speak about financial markets. Thank you, Andrew, and good afternoon everyone. I wish we could be there in person with you, but we're excited to be here today. As Andrew indicated, we've seen a rebound in the US economy since it reached its low part, pointed at quarter to, well, when we look at financial markets and the volatility that we've experienced in financial markets as well. I will say that we've seen more than a full recovery in the stock markets. I'd like you to focus just on a couple of charts that I have on this slide. The top right chart is showing the indices. The major indices for the United States. The S and P 500 is in red, nasdaq composite is in green. And the Russell 2 thousand, which is a stock index of smaller, tend to be smaller firms, is in blue. And you can see the tremendous fall that occurred between February and late March in all three indices. But then the significant rebounded. In fact, that rebound was happening before we started seeing a rebound in the real economy as if the market was forecasting that this rebound was going to be occurring. The other point on this slide is that yellow dashed line, which is indicating expected volatility in the stock market. And you can see as, as markets were falling. In March and in late April or late February rather, we saw tremendous rise and in volatility, which means a great extent of risk, a lot of risk. What else have we seen in financial markets over the year? While we, again, we had a recovery and even more than a recovery by most indices in the stock market, treasury rates, however, have fallen dramatically. So the short-term treasury rate has been near zeros since March. The 10-year Treasury bond yield has been below 1% since March and by the way, below 1% as a historic low for the 10-year treasury rate. We've seen expectations of inflation, which is being measured here by something called a break-even rate at below 2%, which is well below what the Federal Reserve is targeting. On the corporate bond side, we've seen a rise in risk in, at the early stages of the pandemic in March. But that also has subsided significantly. So an increase in risk, both of AAA bonds as well as the high yield, more risky bonds. But then again, a reduction in those credit spreads. Could you move the next likely? Well, what's going on with the markets and, and how much of this is going to impact us in 2021. There are three main factors that had been influencing financial markets and we would argue are going to be continuing to influence markets to some extent. The first one, it includes the differential impacts of covert 19 on the economy. As the top slide shows on the top right, we've seen a dispersion of effects on different sectors in the S and P 500, which means the, the economy underlying bed. We've seen a large increase in information technology returns and consumer discretionary returns. And by the way, consumer discretionary does include they miss company called Amazon, consumer staples spending. So everything that we need for our home that's included in that. And there was a strong, strong performance of companies in that realm and also health WHO lost well energy with the fall, dramatic falling oil prices, the stopping of, of travel that hit the energy sector very hard. Industrials were also hit very hard. The industrials include airlines and of course that was impacted by travel. What else has been impacting the market? So weeks we've seen this different effect, almost like a to market effect in the stock market. We've also seen extraordinary monetary and fiscal stimulus which Andrew mentioned that our reserves, purchases of assets has been 3 trillion. And that's much larger than what they, what they did in the financial crisis. It represents a 70% increase in the federal reserve holdings of assets. Also, importantly, they have increased the type of assets that they're purchasing. It used to be more treasury bonds, mortgage-backed securities, but now that's been expanded to include corporate bonds and municipal bond sent to provide. Other sources of lending to businesses. So an extraordinary stimulus by the Federal Reserve. And as Andrew mentioned, we saw very large stimulus by the government on the order of nearly $3 trillion, bringing the budget deficit to about 15% of GDP. The other aspect that's affected markets is just heightened risk. And that's because of the heightened uncertainty that we see about the future due to the spread of covert 19, the economic impact of that, of the virus, whether there will be effect vaccine. We've had some very good news lately on that, but also much uncertainty about the availability just when that will be rolled out. And of course, we had the run-up to the election and what that would mean for fiscal spending, for taxes, for regulations going forward. So these are the three dominant factors that were impacting work. It's in 20-20. And we're still seeing these play out as we near the end of the year or the next slide, please. So as we go forward and think about financial markets in 2021, I'd like to focus on some positive factors as well as some risks. On the positive side, we will continue to see federal reserve support. The Federal Reserve is indicated they are not going to be raising interest rates in 2021, and it could be until 2023 before we see an increase in the Federal Reserve's target interest rates and hence any interest rates that are linked to that. We believe there's probably going to be some kind of fiscal stimulus package passed. The magnitude is uncertain and the timing of that is uncertainty. Uncertain. But we expect that the other point that's a positive for financial markets is the adaptability and innovation that we're seeing in companies. And that's reflecting that they're trying to adjust to this new normal that we're experiencing. We've seen that reflected in positive earnings surprises of companies announcing earnings over the past quarter. And now we're seeing some reports and projections for quarter four. So that's indicating, again that things are less bad than what companies had originally anticipated as they are trying to quickly adjust to to the new business environment. Inflation risks are expected to remain low. That means costs for businesses are going to be low. Interest rates will remain low as a result. And that's going to help borrowing and company earnings. And then we're seeing this news on an acceleration of vaccine development, which is very positive and will hopefully make people, let's that vaccine is out, make people comfortable. Going back to some more normal activities. What are some of the risks? Well, of course, the risks of additional shutdowns due to the spread of the virus. And that's the risk we're seeing today. Also, we're seeing very high valuations in the stock market in terms of what we call price earnings ratios, what we see as the price compared to earnings by different measures, that price-earnings ratio is higher compared to average. And in some cases, this cape ratio is the second highest level. It's been ever. Well, there are two ways that a price-earnings ratio can return to normal. One way is for earnings to rise, that's a positive outcome. A second way, of course, is for prices to fall. We would like to see the earnings rise. But whether PE ratios return to more of an average level is very much of an unknown because we're seeing a lot of changes in the business environment. But that is a risk that, that people are considering. Credit risks are, are possible because of the tremendous buying that the Fed is doing in terms of purchasing of assets, to some extent. That could be suppressing some credit risks. So the risks could be there. These low interest rates could be encouraging financial decisions that in more normal times might not be undertaken just because of the very low borrowing rates that are there. So there's a, there's a risk that, that some credit risk could be heightened, especially if interest rates start to rise. And then it most likely we're going to have a divided government, but there still remains some regulatory and tax policy uncertainty. What is that going to mean for businesses? Well, until we know exactly what policies are going to be adopted by the new administration, that uncertainty is going to remain and so that level of risk is going to remain and we're likely to see continued volatility in the stock market as a result. Overall, we do believe the positives are going to outweigh the negatives for positive equity returns in 2021. And just what that level will be in part will depend on what we see over the next month in terms of greater certainty about where the vaccine is and how quickly it's going to be bolded. So with that, I'm going to pass it along to kill Anderson for the State Outlook. Thanks very much. Thank you, Cathy. Just let me echo all of the speakers thoughts of how much we miss being out and on-site. That does great venue and it's a great event every year. I'm going to just give a little overview of the Indiana economy. You've kind of heard from Andrew and Kathy and how things are going. And of course, India was going to be very similar to that. Indiana is what I call a pro cyclical economy. And that is, we have a disproportionate impact on manufacturing. We really are still at a manufacturing state. And when the economy is going well, then manufacturing does pretty well. And you see in this chart, if you can read it, the job growth, Indiana's outpaced in job growth. Basically from, from 2010 kind of up to 2019, has done pretty well in the first half of 2020 when, when the Covitz shutdowns hit, of course, manufacturing was hit really hard on a lot of the plant shut down. And so our job losses were greater there than in other places as we've recovered. Now we've disproportionately done a little better over the last four or five months. Because manufacturing and other activities like that have been able to go on. Our unemployment stands at 6.2% right now here in Indiana. But there's a little caveat with that. I've got up here that 60 thousand people are missing. And that's the drop-off in the labor force. From from February to now, and those folks have have left. In part. They're not counted as tactically unemployed because they're not in the job market at all. They're not working and they're not looking for work. And a lot of these folks might be people who either four because some of the jobs have gone away two or more likely maybe they're taking care of kids or taking care of family members, those sorts of activities that have taken them out of the labor force. And so if you added those thoughts back in, our unemployment rate would probably be closer to 9%. But overall we are stronger than comparable estates. So if we take a look at the next slide, what we'll see here is that economic growth, of course, is not consistent across the state, either by geographic region or by sector. And this is, this graph here takes a little bit longer range view. But we see that economic growth has been strongest in the Indianapolis area. In the, in the southeast portion of the state down by Google, the Albany area. Some the college has done well. Some other more traditional areas like Anderson had struggled a little more, but we'll get into that in the local forecast. If we think about the jobs segments, construction continues to do really well. Transportation and warehousing, all those things that get ordered from Andrew, from Amazon and going through Indiana a lot of ways that we've got a lot of distribution and transportation there. And Healthcare does well in terms of employment. Health care is interesting because there have been significant challenges in health care with decoded crisis and yet with demographics and all those factors, employment or main strong in that area, we look for areas of weakness. It's in retail, is in education that had been hit particularly hard. So with that, we'll move to our outlook for the coming year and on the next slide. So we're forecasting the output in and will increase and job growth will occur in 2021. And that will offset the damage of 2020. And this is a little bit, one of the challenges is when we're thinking about 2021, were thinking there's going to be a lot of growth kind of in the second half of the year and maybe even the three quarters towards the end. So I think our forecast is a little bit optimistic. But what would you have to keep in mind is I, and a lot of the challenges that we're facing are right now or the fourth quarter and the first quarter of 2021. So once we get beyond that, we think this recovery is going to pick up speed in 2021. Having said that, what we're describing is basically a lost two years. And so we're going to return to 2019 levels by the end of 2021. So that means in terms of jobs and output where we've really missed, We're going to take a big two-year hit here. As Kathy mentioned, we are forecasting in that there's some economic stimulus that is likely to come. And I think it's very much needed here for Indiana. We need consumer incomes to be supported. That will help our manufactured goods. We need small businesses to be supported and we need state and local governments to be able to continue to spend and they're going to be under a big budget crunch. Unemployment will fall to between 4, 5% next year. Which is good. Is that as good as we were in 2019, but it's pretty good by historic levels. One thing that's not pandemic related is the potential for improved trade. We've seen very little information from the Biden administration about what their trade policy is going to look like. So that's going to be something we'll be looking at very closely in 2021. But Indiana really depends on, on exports. And so we're hoping that a few less trade wars and maybe more open and liberal trade policy would be beneficial to Indians economy. And of course, we should say that all of this is dependent upon, you know, improvements in 2021 of the pandemic. As Kathy mentioned, we're very hopeful that a vaccine availability will be really good for the Outlook. And with that, I will turn it over to Dr. labor for the local forecast. Thank you, Dr. Anderson. Over the past several years, Madison County integrator, Matt Anderson, community work to lower the county's unemployment rate. Economic development initiatives have worked to diversify. Didn't she base that call Madison County home? While challenges remain and new challenges present themselves this past year. In light of the Kobe 19 pandemic economic data, represents continued opportunity for Madison County and the greater Anderson community. As you have known from attending past years, Madison County has shown previously continued improvement in the unemployment rate. And we're showing tuning improvement by closing that gap between the state of Indiana and the county. As we all know, things changed dramatically in quarter two of 20-20. Next slide, please. And you will see that we saw a rapid increase in the unemployment rate in quarter two. And it actually peaked at 18.4%, which was higher than the average annual of 2010. All the way back from where we were beginning the recovery from the Great Recession. And at that rate it was a 10.4% average. We can see over the past few months we have start to sell that decline. But as Dr. Anderson mentioned, some of that is related to individuals exiting the workforce due to other reasons. Next likely is taking a look at jobs. The Q1 2020 quarterly census of employment wages indicated that Madison County saw a slight net gain of 0.02% IN jobs over the prior Q1 of 2019. We saw the largest gains in comparison to K12 19 in the arts and entertainment and recreation, with a 24.84% gain. Waste management rules Services saw 7.38%. Professional, scientific and technical services saw 2.86% Manufacturing saw an increase in 2.65%. Injury. That's all the decline. Agricultural, forestry, fishing, and hunting saw. 8.35, 12% decline information. So I 6.3% decline as well as wholesale trade at 4.45% decline as expected with the declining unemployment rate prior to the Coben 19 pandemic wages also saw an increase in Q1 2020 compared to the prior year. Average weekly wages rose 4.41% to an average of 72 per week in Madison County. Next slide, please. Additionally in there from a real estate perspective, based on the September 2020 local market update from the Indiana Association of Realtors. We can see that year to date, fewer homes had been sold as compared to 2019. This is expected related to the Kobe 19 pandemic. However, if we look at September, we can see that that number drafts of the outpaces the year prior. Now, this may be related to folks holding off. But if you talk to the relative right now, they are saying they're having record years, they're having great years. In fact, this is of course, as we saw in the, earlier in the presentation, related to interest rates for mortgages. And so it's an opportunity for Anderson and Madison County, the area, as we see that median home prices have increased by 12.5% compared to 2019 year to date. Next slide, please. Now for the original outlook, you might have noticed a trend today in our presentations. Uncertainty is the key word and their significant uncertainty that's going to impact Madison County's outlook for this upcoming year. As we talked about Coven 19 resurgence, what will that look like coming into early 2021? The availability widespread of LB, specifically of the vaccine. That question, federal stimulus, what will that look like? How will it look and where will it would occur and when will it occur? All could hamper Madison County's ability to recover and delay that recovery. A best estimate of the unemployment rate for Madison County from a year from now, but in September 2021 is anticipated to be around the level it sets that currently, there's too much uncertainty to know if we have a vaccine sooner. Well, we're going to see changes sooner. We're going to see ourselves start to move back a little faster. If we see delays, then we will see that unemployment rate continue to languish over time. Now, while the pandemic has created these challenges, there are several areas of strengths and opportunities that we need to know and take take measure. The first is the county's continued efforts to attract new businesses, to diversify its industry base, and its ability to retain those firms and encouraged the expansion of existing businesses. The examples in early 2020, in late 2019 of the MTN extinct expansion that was announced in February of 2020 and the CRM acts expansion that was announced in October of 2019 are two examples of the county's efforts in this area. The Anderson Advanced Manufacturing Program, often referred to as AMP, is another, is a unique workforce development curriculum. And it helps support the local community by developing a local workforce and connecting that workforce. With local area corporate partners. Lastly, the real estate market is a positive opportunity for Madison County to pursue growth, especially in the southern half of the county. Thank you for your time today, and I will turn it over to Dr. ID. Kasner for the Q and a. I think he's wonderful. Press go. I encourage everyone to submit their questions through the Q and a function. I know that those who are present in person, I can hand their questions over to Dr. Lieber and he will submit them for us into the Q and a function. So Kyle, I'm going to start with you if one of the questions aren't, the trade policy changes, Arabic, you mentioned, what are their policy changes are unlikely to have an impact on the economy. So I think there are a number of different things we're going to see big. So when we talked about was stimulus and fiscal support, right? And that's going to be really important for the near term. I just don't think we can understate that. If as things looked like a lot, there's going to be a lot of pullback in economic activity right now. People have to stay home a little more. And we're going to need that. And we really needed it pretty soon. I'd say that's the biggest area. And looking at kind of support for families. I think we're seeing a lot of folks, a lot of what I talked about with people leaving the workforce. A lot of those are women because they're taking on the more traditional caretaker roles and how we support those families. Going to be incredibly critical to getting through the next six months. That makes sense bank here, I can't be bound to neon. We see, here's a question for you. We've seen the short-term interest rates fall to 0 if the economic recovery stalls. Could we possibly seen negative interest rates in the United States? That's a wonderful question. I never expected that. Many years ago we would see negative interest rates in Switzerland and parts of Europe, and we've seen it there for a while in Japan. My own view is that we will not see it in the United States. Every thing I read from the Federal Reserve does not provide an indication that they're likely to reduce law allow interest rates to go negative, that they don't see the value added in, in taking that very significant step. So my guess is no, but I do think there could be times as we saw in March that if we experience another unanticipated shock, period of extreme stress and financial markets that rush to safety could vary in the very short-term, cause a short-term interest rate to go negative as it did in March, but it will not. My my forecast is that will not be sustained going forward. So we'll see interest rates remain low but still above 0. Got it. Thank you. Andrew. We, we get we have an audience question That is with regard to the, the federal deficit in coming years, the impact of the federal deficit and what you expect to happen there. Well, so it's a great question. And obviously the recent two quarters experience, mostly driven by the by the stimulus that we've already discussed has, has led to a dramatic uptick in the federal data as well as the current deficit. So, you know, obviously in terms of what sort of impact that's likely to have going forward, I think right now, is largely going to be determined by what sort of growth prospects we can expect for the economy. So, you know, if, if, if GDP can expand and then the growth of the economy and economic activity can expand. It's unlikely that dramatic uptick is likely to create a drag on the economy. But to the extent that our outlook or are our projections going forward are, are not matter. Our end up being a little bit lower than what we would hope, then you might see some potential downsides to that current deficit. That makes sense. If I might stay with you for just a second. I know you discussed labor force participation rate, but what aspects of the economy do you plan on tracking due to their role in shaping the trajectory of the recovery? Yeah. So I was going to actually so I'll echo caught Kyle's Kyle's point here. I, I've actually, I think the labor force participation rate, it is one that we'll want to be keeping a very close eye on. I mean, what we've seen in the last we've seen in the last few quarters in terms of the declines are basically decade long movement. So we saw two percentage point drop. And of course that was as Kyle's already articulated, well, split across different segments of the population. But but that, that two percentage point drop is represents what we've experienced over ten years from 2 thousand to 2010 for instance. And so now obviously those that drop is transitory and we see a rebound with with the, with the recovery and the and the vaccine hopefully then it's likely not to create a drag on the economy, but to the extent that that is a permanent shift, that will certainly have an influence on what we can project and what we can think about in terms of growth for the economy going forward. Great. Thank you. Dr. Lieber, If you can hear me, one of the questions that we have is what can be done to attract and retain businesses to the local area. You had mentioned this in your presentation. Are there specific businesses and what can what can be done more specifically? It's a good question. I think the importance is that is to continue the path and the directory that that Madison County has been working towards. So it's small steps, it's not going to be leaps in terms of, of that process. So the more businesses that we attract them, war people that we will attract as we attract more individuals to come back into the county, you will see then more consumption as they seem more consumption, then we'll see more businesses being interested in being attracted to that population Network for space. And so they efforts that we're doing as a county, we can continue. The pandemic does, as we've talked about, create some setbacks forced but to continue on the road that we've, we've done so far. Recommendation ME. Thank you for that information. Can't be Bonjour Neal. We have a question about the pointed at individual investors with individual investors say, facing so much uncertainty. And everybody on the panel talked about uncertainty. As we head into 20-20 wine. How can people protect their 401K portfolios? That's a, that's a great question. I wonder the same. So I think it's very important for investors to keep the long-term in perspective here. As we experienced volatility, it doesn't mean you run for the door and start selling just because of recent news item. So keep the long-term perspective. Because we know, and we've seen going back many years, that markets do recover over time, even if they fall, we saw 30% fall in the S and P. In a matter of six weeks, the S and P has recovered by more than what it started out in it, the peak in February of this year. So we see markets recover over time. Second, diversify. Diversification still works. We have seen strong performance of growth stocks over this year, but as the economy opens up, we'll see other stocks start to come back. And I think the key is how, how are these other companies going to adapt, innovate in order to be able to move forward under the new business environment. But I do expect that to happen for many. Internationally we're seeing markets rebounded at different rates. So still diversification can benefit an investor by lowering their risk. Be careful of holding long-term bonds because interest rates are so low. And what that means is once the recovery happens and interest rates start to rise, Long-term bonds are much more price sensitive to that rise in interest rates. And finally, be very mindful of any fees that you see in your mutual funds. Look, look for those thes. Sometimes it's hidden, but look carefully because the higher the fee, the lower your return. Great advice and if I might stick with you and then I'm going to ask everyone to sort of think about this next question. The question is, depending on what happens in Georgia, we could end up with a divided Congress, so controlled by different parties between the House and the Senate. And some people are saying that gridlock, it can be a good thing. And some people are saying that gridlock could be a bad thing. And I'm curious whether from the financial markets or the national economy or the state economy, even the local economy. What are we thinking if it remains divided? Is that good news or bad news? Cat, Kathy, why don't we start with you? Well, I else, I'll start from what I think is the perspective of the financial markets. And I think a divided government can mean you're not going to see drastic changes in tax policy or in regulation. And realize that when you have big changes like that, it has an impact on companies. And that may that may be an adverse impact. So I think to the extent that worse, we may see more incremental changes as a result of a divided government will, will be helpful to financial markets. And because it's going to be helpful to business planning. Good. Kyle, you want to take it next? Yes. That's a great question. And I I agree with Kathy. I think the thing that we would think about is, you know, divided government does Largely mean stagnation. And that's OK when the economy is going well, because we don't need a lot of activity from the government. It, it's a little less, you know, less desirable maybe in situations like we have now. I mean, I think there probably would have been a stimulus package passed this fall had it not been for kind of the political posturing between the, the House Republicans and the White House. And so that was probably not a good thing. But Canada echo Cathy's point. Like one thing I think about is health care and health care policy. Big sweeping health care policy can be a challenge for, for businesses in the economy. We're unlikely to see that, right? We're going to see that incremental and change it and hopefully improvement. That can't be a good thing. So I think it's okay as long as they can come together and pass those things that are really necessary. Greg, Andrew, HEPA. Q. Yeah, that's a great question, and I certainly agree with both or all the comments that the caffeine and Kyle I've already described, I guess the sort of other angle or her piece that I'd add to this. Or to be in a divided government setting. You know, you want to keep in mind that as was already mentioned, you know, the better reserved monetary policy is relatively constrained right now. And so again, to the extent that there are economic headwinds coming down the pipe for us, hopefully not. But to the extent that there are, you know, we sort of have only one side of, of of policy that can really be utilized. And so I think keeping that in mind, obviously, hopefully with the election being done, an element of uncertainty has been removed. And so some of the movements in that regard can, can be done. And then the other piece that I would just bring the bears trade policy is going to be important going forward. Certainly. And so, you know, again, to the extent that we've had in pipe, individuals on both sides of the aisles are suggesting that we should now move away from certain trade deals. And so I guess, I think that that's going to be another important piece to all of this going forward for Penn State economy. And Lani have IQ would occur were wholly experiments in thinking about from the local economy the need and impact of business expansion. Again, a divided government would put allow for incremental changes that have large sweeping changes that may hamper or support that growth. That makes sense. We've had a question about from, from the economic perspective, who has been the hardest hit by the pandemic. And we've heard about some of the industries in some of the areas that had been particularly hard hit. Maybe if we can think about this almost internationally relative to the US. So I'm Andrew, do you want to give us some insights in terms of who has been hard-hit internationally. Yeah, so I guess another great question. Again, I tried to highlight some of the broad strokes from this, but certainly countries, economies that were setup more geared towards services and say, leisure and hospitality had been hit, uh, shortly. And, and that's certainly a parallel that we've seen within the country, across states, even within this country. So you know that certainly on piece to this. And then the other, the other aspect to this is that countries, cuz, you know, fiscal position going into the pandemic. Basically the pandemic was an unexpected shock, but that basically greater situation where countries, fiscal state deteriorated quite extensively. So countries that are service oriented and then ones that might have been going in to the pandemic, not in quite as fiscally sound of shape had been particularly that are. And then, you know, then the energy piece to this is sort of the other wrinkle aware. You know, we've seen oil prices fall immensely. And just demand for energy declined quite a bit. And so, you know, countries where that piece fits a significant component to tech economic activity have also been hurt quite, quite badly. Okay. And KOG, I don't know if you'd like to address this same question, but in a comparison between the state of Indiana and other states in terms of you mentioned the impact that certainly Copan has had on us. How do we fare relative to other states? We've fared. Ok. I do think that our employment hasn't been hit as hard as some of our pure states that we look at. Illinois and Michigan and Ohio. We've, we've kind of weather that a little bit better. But then I started thinking about within the state, it's who's getting hit the hardest. And you look at by income level, you know, it's the people in the lowest core tile or the lowest half. They're the ones who are losing their jobs right now because a lot of those are the kinds of service industry jobs. They're really sensitive to. Restaurants and hotels in the service sector, kind of jobs at the lower wage levels. Those are the folks who are getting hit the hardest right now. And professional folks are kind of going along as if their business is mostly Okay. And we're really seeing a sharp divide in our already kind of divided economy. But if anything, it's getting worse right now. Very good. I'm Kathy bunch anneal. The stock market has certainly surged recently and reacted positively, especially to the positive vaccine news. Has it been overly exuberant, overly enthusiastic given all the hurdles that we have in terms of the logistics of distribution of that vaccine. I don't want to say whether it's overly optimistic. It is pricing in what it knows. And I think those prices are based on the News which came in. It was unexpected to have two companies with such positive results. You're right that there is such a degree of uncertainty around exactly when, you know, when the vaccine can start to be distributed. And if that starts to disappoint the market, then we could see some, some pull back in that. But I think broadly it's important to keep in mind this is positive news. Or economic growth is just a matter of when that growth is really going to keep continuing with the vaccines implementation. So we don't, don't be surprised if we see some pullback. We're actually seeing it today a little bit. But I expect as we continue, companies earnings are going to be rebounding, continuing into 2021, that'll be probably reflected in the market. And q I see. We're just about out of time, but Lani, I'll I'll throw this last question to you. And that is if you were advising leaders in the local market, what's the one positive thing? You would send their way and the one negative thing you would send their way. Fix something to be cautious about as we look at this uncertainty, but something to be optimistic about as we approach the end of the year. Good question. I think the positive is the continued listening to the local labor, labor, labor markets needs and responding to them positively and helping address them. I think the concern or the area to continue to be mindful of would be would be at post pandemic. How does those, how do those needs change and how does nasa and counting enters and adapt to those changes? I'm specifically and it makes alive sense. We're all going to have to be mindful of how life is going to change for us. I know it's an often used over are overused expression new normal. But what our new normal will be going forward will be something that we will all have to adjust to for sure. I thank you all for such an expert sharing of information. It's been so helpful, such clarity, even though we're dealing with tremendous uncertainty. And at this point I'm going to turn it back over to Debbie for closing us up and concluding this meeting. Debbie, Thank you, Dr. Kasner and panelists, we certainly appreciate wisdom and thoughts today. We know that the information will be helpful to decision-making in the coming year. And thanks also to all the rote Arians and guess who joined us in person or virtually. And we hope next year that we can do this in person. So there is an additional thing. There were some posters that were brought in acknowledgment of Anderson community schools, receipt of our Rotary grant to purchase water bottles. They are here on the table. So if you have a storefront that you could display those. We'd appreciate if you would do that. So thanks again for joining us and we wish you the best holiday season ever.