February 27, 2015. Retrieved online March 2, 2015 from Bulletin Staff Report , Las Cruces Bulletin
[Excerpts below reprinted with permission: Read the complete Las Cruces Bulletin article]
Eugenio Alemán, director and senior economist at Wells Fargo, worries that his kids’ buying habits threaten the future growth of the U.S. economy.
“I have two millenials,” he said. “I pay their student loans, and still they have no interest in buying homes. They just don’t want to be tied down. My son, Doug, just wants to travel. That’s what they do.”
Alemán said although high student loan debt and other economic pressures are usually blamed for young Americans not buying homes, it isn’t the money.
In order for the housing market to really take off, he said, mortgage lending has to increase at least 10 percent per year, and that isn’t happening.
Alemán gave the national perspective while New Mexico State University State Regents Professor of Economics and International Business Jim Peach spoke on the New Mexico economy at the fourth annual Economic Outlook conference Feb. 19 at the Las Cruces Convention Center.
Wells Fargo and NMSU cosponsored the event.
Both economists had good news to report, but were cautious in forecasting the future.
Alemán said the U.S. economy is on track to grow at about 2.8 percent this year.
Alemán said the biggest domestic issue is when the Federal Reserve will move to increase interest rates and by how much.
Peach said New Mexico’s economic indicators rose in the past few months, but growth trails neighboring states and the rest of the nation.
“The federal budget decreases are over, and that’s a good thing for New Mexico, but we’ve got some problems coming,” he said.
Chief among them is the decline in commodity prices, especially oil and gas prices.
“Evidence suggests we haven’t seen the bottom (in oil and gas prices) yet. ” Peach said.
Peach said 19 percent of the state’s direct general fund income, and about 30 percent of indirect income comes from oil and gas.
Commenting on the state of education in New Mexico, Peach said the state’s high school graduation rate is 68 percent.
“We’ve got to turn that around,” he said, adding the performance of neighboring states’ economies is due in part to the success of their K-12 educational systems.
In response to a comment from a member of the audience that per capita income masks a worsening income disparity in the nation, state and city, Peach said: “I think it is perhaps the greatest challenge to the American economy.”