Unraveling the “Blah Economy”: What Lies Ahead?

Paul FennerBusiness & Economics

blah economy, economics, recession

Allison Schrager is an economist with a knack for breaking down complex economic scenarios into relatable nuggets of insight. Recently, she throws light on a question that’s been buzzing in every investor’s mind: What if our current economic conditions—high inflation, labor shortages, soaring house prices, and mortgage rates—are here to stay?

Everyone’s been holding their breath for an inflection point—the moment when inflation starts to ease and economic stability returns. But what if this pivot is still a speck on the horizon?

Enter Allison’s concept of the “blah economy“. It’s a state where low unemployment coexists with wage increases trailing inflation, creating a feeling of scarcity and uncertainty. We may see industries that boomed indiscriminately start to retract, but the economy, in essence, continues to grow, albeit sluggishly. As a result, stock markets experience volatility without significant growth. In this economy, people are employed and spending, but the pinch of inflation makes prosperity seem elusive.

As Allison illustrates, “If we slog along full of uncertainty, the sudden turn, and recession we are expecting just never happens.” This may sound like a softer blow in the short term—fewer job losses, stable housing—but over the long haul, it signals slower real wage increases, less investment, and ultimately, weaker growth.

So, how can we navigate through this “blah economy”? What strategies should we adopt? Let’s explore these questions together and ensure that your financial objectives remain within reach. Connect with us for insights that make sense of the economic jargon and guide your wealth management decisions.