If you enjoy researching and analyzing economic issues and their related data using math and statistics, and if you enjoy making forecasts, designing policies and advising others through reports and presentations, then working as an economist might be an ideal career choice for you. We’ve interviewed two economists with very different job descriptions to give you an idea of the possibilities this field offers.
- Being an economist is about more than analyzing numbers.
- Economists need to write well and communicate clearly.
- Being an economist offers opportunities to work with all types of data and a wide variety of firms.
- As an economist, you may choose to work in a variety of businesses and industries, including academia.
Scott Anderson, Chief Economist, Bank of the West
Scott Anderson is chief economist for Bank of the West, a bank with over $101.4 billion in assets and more than 10,000 employees in 24 states as of March 2020. He has worked there since August 2012; previously, he was a director and senior economist at Wells Fargo in Minneapolis for 11 years. Before that, he worked for Moody’s Analytics and the International Monetary Fund. Anderson holds a bachelor’s degree in economics from the University of Minnesota along with two degrees from George Washington University: a master of philosophy and a doctorate in economics.
Anderson is 44. It took him 12 years to earn his degrees. He says his coursework was challenging, and he had to pass comprehensive exams in macroeconomics, microeconomics, monetary theory, international trade, and finance to earn his master's degree. He also needed to write and defend his dissertation to earn his Ph.D. What made his experience particularly challenging was that throughout his graduate studies, he worked as a research assistant, and after the first year, he also had a teaching fellowship.
Anderson and his bank are based in the San Francisco Bay Area. Because they are three hours behind the major government and financial centers on the East Coast, he wakes up at 5:00 am to read the news as it breaks and to review the government economic reports as they get issued. When a major report is released, such as the latest jobs report, he will email a brief analysis to his colleagues and media contacts. “I discuss what the new data mean for the economic outlook, the Federal Reserve’s monetary policy, and the markets. Following that email, a few journalists likely would call me and I’ll provide commentary to help them write their articles,” he says. He does his early morning work from home, which allows him to spend time with his children before they leave for school.
Another analytical activity for Anderson is his detailed three-page “U.S. Outlook,” which he drafts every Thursday and distributes by email early every Friday morning. This report provides a detailed forecast table of the major U.S. economic indicators, interest rates, oil prices, and the dollar over the next two years; it also peeks at the releases for the coming week.
As an economist, being able to write well and interact with people in other professions should be equal to your number-crunching abilities.
“I can’t emphasize enough the importance of not just being a good writer, but also being able to write quickly, concisely and in a compelling way that grabs the readers’ attention and that focuses on the most relevant information,” Anderson says.
Once Anderson is at his office, he meets with his executive team and briefs them on economic and financial trends as well as the upside and downside risks that they should be focusing on to help the bank succeed in today’s economic and banking environment. In between meetings, he usually works on a presentation for an upcoming speaking event.
“You’d be surprised at how much public speaking comes with being an economist for a company like ours,” Anderson says. “For anyone considering this kind of position, I’d suggest taking some public-speaking classes or presentation training. It’s important to keep the presentations lively and interesting, and to keep the audience engaged,” he says and adds that his presentation training also helps in conversing with reporters.
His job frequently takes him to the other states where his bank operates, where he spends time with clients and prospects, answering their questions about the economy and its major drivers. “I enjoy breaking down what could be perceived as a complicated economic issue and helping people not only understand what’s happening but also if and how it impacts their own financial situation,” Anderson says.
“On any given day I wear many hats: I’m a mathematician, a pundit, a researcher, a writer, and a teacher," said Anderson. “It’s hard to say that there’s a ‘typical’ day for me, but the variety and excitement are definitely what I love most about my job.”
Anderson tries to balance work with spending time with his family and friends. He tends to work at least 60 hours a week, but very much enjoys the work. “Although I’ve been an economist for more than 20 years, I never get tired of digging through economic and financial data, connecting the dots, thinking through various scenarios and providing my own point of view of where the economy is headed,” he says.
A Day In The Life Of An Economist
As an economist, it will important to learn to balance your work with your personal life, as typically economists have very busy careers.
Mike McMahon, Senior Manager of Rates, Economics and Energy Risk Management, Snohomish County Public Utility District, Everett, Wash.
Mike McMahon, 64, is the senior manager of rates, economics and energy risk management for the Snohomish County Public Utility District in Everett, Wash. His primary concerns are rates and risk management for an electric utility that covers a 2,200 square-mile area north of Seattle and that has a $712 million annual budget. He holds a bachelor of arts in economics from Western Washington University, and he holds both a master of arts and a Ph.D. in economics from the University of Washington.
McMahon typically works from 8:00 am to 5:00 pm, and his days consist of providing economic analysis on both recurring and temporary issues. “Yesterday, a story came out that our biggest customer, a major manufacturer with worldwide sales, is going to increase production,” McMahon says. “I spent part of the morning trying to determine what this might mean for our energy sales and the local economy.” This morning, he is working on a PowerPoint presentation for an upcoming meeting with the Board of Commissioners to discuss passing on a power-cost increase to the utility’s customers. He needs to collect information from different parts of the company about things such as customer usage patterns and power costs in order to determine the impacts on the utility’s various customer classes. Working on this presentation will occupy much of his time over the next 10 days, he says.
The recurring issues McMahon handles include sales forecasting, which “is largely an exercise in the microeconomics of demand analysis with some regional multiplier analysis,” McMahon says. Another of his recurring roles, that of energy risk manager, “is almost perfectly suited to an economist,” he says. “It brings together the concepts of supply and demand with the statistical concepts of probability distributions.” He also chairs a short weekly meeting of the Energy Risk Management Committee. In the days preceding the meeting, he supervises two analysts in updating a risk model that he builds and maintains to quantify the utility’s power-market risk exposure. He also provides a formal quarterly report to the Board of Commissioners on the Energy Risk Management Committee’s activities.
“If you want to be influential, be prepared to talk in front of people,” McMahon said. “The outlook that an economist can bring to most issues will capture people’s attention and they will want to hear more.”
He also attends biweekly, hourly meetings of the short-term power-supply strategy group, which considers the latest information on the utility’s generating resources and power demands. At the meeting, “we decide on our short-term power purchases or sales into the wholesale power market,” McMahon says. He is also frequently asked to analyze legislative bills for the utility’s legislative affairs group.
Occasionally, he makes presentations about the economic analysis of current issues such as carbon pricing in the context of reducing greenhouse gas emissions or the recent federal budget and what it might mean for the utility and its customers. He also attends and often makes presentations at the biweekly Board of Commissioners meetings.
His workdays can run much longer than his usual 8-to-5 day when he’s preparing for major commission decisions such as changing the prices charged to customers, and he occasionally works weekends. He can schedule his vacations fairly freely as long as he keeps upcoming commission-decision timelines in mind.
“I would tell students taking economics classes that the concepts they are learning actually work and can be applied in the business world,” McMahon says. Throughout the year, I’m applying the concepts of price and income elasticities of demand, discounting and present value analysis, opportunity costs, and multiplier analysis.” He advises economics students to take classes in statistics, accounting and law.
The Bottom Line
Being an economist isn’t just about analyzing numbers; you have to be able to communicate clearly. The career offers opportunities to work with all types of data and to work for a wide variety of firms. Anderson and McMahon are two economists who have forged careers in different ways.