Weather Forecast


Economist: New recession unlikely for now as America enters 'bunny market'

1 / 4
Jim Paulsen, Chief Investment Strategist at Wells Capital Management, gives his keynote presentation on Wednesday, Feb. 15, during the Chamber of Commerce’s annual Economic Outlook Forum at Fargo’s Ramada Plaza & Suites.David Samson / The Forum2 / 4
Business community members gather on Wednesday, Feb. 15, for the Chamber of Commerce’s annual Economic Outlook Forum at Fargo’s Ramada Plaza & Suites.David Samson / The Forum3 / 4
Scott Green, Market President of Starion Bank, speaks on Wednesday, Feb. 15, during the Chamber of Commerce’s annual Economic Outlook Forum at Fargo’s Ramada Plaza & Suites.David Samson / The Forum4 / 4

FARGO—Forget about bulls and bears because the country is in a "bunny" market, according to a nationally recognized economist.

Jim Paulsen, chief investment strategist at Wells Capital Management, delivered the keynote address Wednesday, Feb. 15, during the Fargo Moorhead West Fargo Chamber of Commerce's annual Economic Outlook Forum, which drew about 600 to the Ramada Plaza & Suites.

As the U.S. prepares to enter the ninth year of its recovery from the Great Recession, Paulsen said things are finally poised to break out of the slow growth and "chronic fear" of another recession that he said has kept the economy relatively flat.

That mostly owes to officials and consumers finally having confidence, he said, which has started to happen in the last 18 months as the country returned to full employment, meaning an unemployment rate under 5 percent.

Rapidly rising earnings and lower competitive interest rates and other factors that lead to a bull market, which is marked by rising share prices and more buying, don't seem possible this far into the recovery, Paulsen said.

The same is true for conditions that contribute to a bear market, which sees slumping share prices and more motivation to sell, he said, because that kind of market is only sustainable during a full-blown recession.

"So if you're not in a bull and not in a bear, what are you in?" he said. "A bunny market, one that hops around a lot and doesn't go very far."

Faster growth?

During The Chamber's annual event, Scott Green, market president at Starion Bank, presented findings of the annual local Business Conditions Survey that looks for factors driving business successes and challenges for the coming year.

Many findings of the survey, which had 159 respondents out of about 2,100 Chamber members and was conducted by the North Dakota State University Department of Management and Marketing, show the issues have stayed the same in recent years. Businesses reported facing increases from 2015 to 2016 in employee compensation, sales revenue and operating costs, for example.

Green said the survey also points to a frequently cited problem here of finding enough workers to fill jobs. Difficulty attracting and retaining qualified employees was the No. 1 issue respondents said they expected to hurt them in 2017.

Paulsen, meanwhile, spent his keynote address focusing on national and global economic conditions, often reiterating his belief that America's current recovery could continue for several years. If that happens, it will buck the trend of a new recession starting up within two years of the country reaching full employment, a trend that's been observed since the end of World War II.

His confidence owes to several factors, including his belief that those in the millennial generation will spur the economy more as they increasingly get married, buy houses and advance in their careers.

For the first time since the Great Recession hit worldwide in 2008, he said, almost all countries are now simultaneously seeing a broader impact of the recovery. That means improvements are starting to be felt by more people than ever, which could continue to boost confidence.

At the same time, inflation is ticking up globally after years of global deflation and concerns in the U.S.

While Paulsen said he believes these conditions could break the country out of the slower recovery rut it's been in, he still doesn't believe a rapid boom is imminent. Instead, he said the U.S. could experience 3 percent annual GDP growth compared to about 2 percent it's seen in recent years.

He said these factors that have built up in the past two years, both nationally and globally, have caused the booming stock market that's reaching new highs more than the election of pro-business President Donald Trump.

"To me, Trump is the tail on the dog. It wags a lot, but it's the dog that matters," he said, explaining that "the dog" is the acceleration of growth, a broadening of recovery impact, a restart of the earning cycle and an end of deflation, as well as other policy and economic changes.

Ryan Johnson

Ryan Johnson is the Features Editor for The Forum of Fargo-Moorhead. He previously wrote for The Forum and the Grand Forks Herald.

Have a comment to share about a story? Letters to the editor should include author’s name, address and phone number. Generally, letters should be no longer than 250 words. All letters are subject to editing. Send to

(701) 241-5587