As part of her role as an adviser to the New York State Assembly Ways and Means Committee, Brooklyn College Department of Economics Chair and Professor Merih Uctum offered a report at the annual committee meeting of the New York State Assembly’s board of advisers on December 11, 2025. During the presentation, Uctum delivered a comprehensive economic briefing offering a clear assessment of national economic conditions, emerging risks, and long-term policy challenges facing lawmakers. Uctum reported that the U.S. economy continues to grow at a steady pace and is outperforming most other advanced economies. Gross domestic product remains above its long-run potential, reflecting resilience following the pandemic. However, she cautioned that the post-pandemic recovery is losing momentum and that growth has become increasingly uneven across households and industries. Central to her testimony was evidence of a K-shaped recovery, in which higher-income households and technology-intensive sectors continue to expand while lower-income workers and traditional industries lag behind. Although overall consumption remains strong, Uctum noted that it is largely driven by affluent households. Consumer sentiment has fallen to historic lows across income groups, and wage growth for lower-income workers has slowed markedly since the pandemic, contributing to rising inequality. On business investment, Uctum emphasized that private investment outside the technology sector remains weak despite corporate tax incentives and elevated stock market valuations. She explained that firms are constrained less by borrowing costs than by excess productive capacity, while investment growth remains concentrated in technology, software, and intellectual property. Addressing monetary policy, Uctum indicated that current interest rates are broadly consistent with economic fundamentals. While financial markets anticipate rate cuts, she noted that persistent inflation and a relatively tight labor market provide limited justification for near-term easing. Uctum also highlighted mounting fiscal sustainability concerns. U.S. government debt, already elevated before the pandemic, has risen further and is on an unsustainable path under current policies. Nevertheless, she explained that strong global demand for U.S. Treasury securities—driven by foreign investors, geopolitical uncertainty, and growing demand from digital finance firms—has so far prevented sharp increases in long-term interest rates. Addressing concerns about the impact of AI, she warned that the AI-driven labor market disruptions are already affecting young and entry-level workers, particularly in the technology sector. On a positive note, however, she concluded by pointing to U.S. global leadership in artificial intelligence as a source of long-term optimism, which is also reflected in companies’ investment in the industry.
