Rising government debt, not high gas prices, was tagged as the most worrisome aspect of the country's rebounding economy by the investment experts who addressed the North Shore Chamber of Commerce's annual Business Expo Tuesday.
The crowd that filled the exhibit hall at the CoCo Key Hotel in Danvers provided visual evidence to supplement the encouraging message delivered by Robert Lutts, president of Cabot Money Management in Salem, and John Traynor, senior vice president and chief investment officer of Connecticut-based People's United Bank.
According to Traynor, a mild winter has boosted the outlook for the U.S. economy in the first quarter of 2012, the unemployment rate has been going down more rapidly than anticipated, and "U.S. companies have reported increasing profits, driven by strong labor productivity and cost-cutting."
Indeed, later that morning, Associated Industries of Massachusetts released its monthly Business Confidence Index for February, which showed a 2.1-point increase from the month before, and fourth consecutive monthly increase to its highest reading since last April.
In a release accompanying these figures, Marblehead's Raymond G. Torto, chief economist at CB Richard Ellis Group and chairman of AIM's Board of Economic Advisors, declared, "This is beginning to look like a real pattern of improvement, coming back from the decline of mid-2011."
Both Lutts and Traynor described the recent spike in gas prices as a temporary glitch. Of much more concern, they said — and something we expect will become a major point of debate in the upcoming presidential election — is our growing national debt and resulting inflationary pressures, which, if left unchecked, could create an entirely new set of economic problems.