Sharing his perspective Friday regarding the release of the February 2023 US Jobs Report, Dr. Sean Snaith is talking about the economy as this week’s The Big Five guest.

“It’s a mixed bag in a lot of ways,” said Snaith, a nationally recognized economist and director of the University of Central Florida’s Institute for Economic Forecasting. “The jobs numbers and unemployment were higher than we expected, but wage growth wasn’t as rapid as feared.”

What does that mean for markets and a Fed Reserve, which signaled a more hawkish stance this week?

“We didn’t go from a four-alarm fire to a five-alarm fire with this data report, but the inflation flames aren’t out either. And nothing today indicates that the Fed needs to change its more aggressive approach to raising interest rates,” Snaith said.

Snaith also noted that the jobs data by sector matches what we’re seeing in consumer spending, with leisure and hospitality leading the way. “People are still spending on experiences and services, but they might be cutting back on higher-priced goods like furniture,” Snaith said.


How high do you expect the Fed to take rates and do you see a cap in the next 12 months? 

I think that the Fed will complete the tightening cycle by the end of 2023 with the federal funds rate range between 5.75% and 6.0%.

With the delay between interest rate hikes and measurable impact on the economy, do you think the Fed is being too aggressive?

The lags in the effects of interest rate hikes are well known, if not well quantified, I think the Fed has not been aggressive enough as inflation is proving to be more robust than the Fed’s previous actions would indicate. This is why we are seeing the Fed via statements indicate that they are going to be taking a stronger approach moving forward.

What impact is the minimum wage increase having on the small business community?

Right now, the minimum wage is not a factor as it is currently below prevailing market wages in the economy. High wages and shortages of labor have however been difficult for small businesses as they often do not have the pricing power to raise prices on their customers that large firms may have.

Do you see a correlation between inflation, the rising costs of goods and minimum wage increases? (Do you see inflation as almost a primer for consumers who theoretically will be paying more for goods and services as the minimum wage continues to rise?) 

The minimum wage is only binding when it is set higher than market wages for lesser skilled workers. There is a general correlation between expected inflation and overall wages. Making sure that expectations for inflation do not take root is probably the most important element in their battle to bring inflation back down to the targeted level of 2%.

As AI continues to advance, what Florida industries do you see as ‘safe’ for workers looking to upskill and students preparing to select a career path? 

I think the impact of AI is not yet fully understood, but like the advance of robotics, I would expect that while some job displacement is possible, AI may prove to be a tool that enhances labor as opposed to replacing it. It will also result in the creation of new industries that might not have been conceived in absence of its development, much the same way that the internet has changed things. I think it will have its greatest impact in white collar industries. AI isn’t going to repair your car or dishwasher. AI is in its early stages and is right now more hype than substance. For many there will not be a single career path, but more of a “career limb” that has multiple branches that workers will encounter over the course of their working lives.

Sean Snaith, Ph.D., is the director of UCF’s Institute for Economic Forecasting and a nationally recognized economist in the field of economics, forecasting, analysis and market sizing. He has been recognized by Bloomberg News as one of the country’s most accurate economic forecasters and has served as a consultant for both local governments and multi-national corporations. Before joining UCF’s College of Business, Snaith held faculty positions at Pennsylvania State University, American University in Cairo, the University of North Dakota and the University of the Pacific. More of Snaith’s work is available at or you can follow him @SeanSnaith.