Economist Reveals Expectations vs. Reality for the U.S.Posted on Wednesday, November 8th, 2017 by Rick Worrel
In Industry Trends, tagged in Tags: industry summit
A few weeks ago, Dr. Chris Kuehl, Managing Director of Armada Corporate Intelligence, offered economic insight at Affinis’s third Industry Summit. In his presentation, “Are We Where We Thought We Would Be? – The Economy at the End of 2017,” he offered a number of takeaways. We found these to be particularly compelling.
Many post-election expectations have not come to fruition.
- Many predicted the demise of the Affordable Care Act, but there are deep divisions in the GOP, and Kuehl predicts there will be no action on this until after the 2018 election.
- Tax reform was also expected, but again there are differences within the GOP, making it difficult to build consensus.
- When it comes to trade reform, a NAFTA rewrite was anticipated, but industry opposition is mounting.
- Infrastructure was a priority, but we are no closer to finding the $1 trillion needed for a program.
- Deregulation has been hit and miss. There have been some major changes for energy, but not many with regard to labor.
Growth is “Ok,” but unsatisfying.
There is no inflation to speak of, and unemployment is expected to stay low indefinitely. However, there is little room for margin.
Current economic data is contradictory.
- Consumer confidence is up, but retail isn’t.
- The stock market is setting new highs, but a quarter of those investments are from foreign money.
- While manufacturing data looks good, services appear a little less dynamic, and they make up 80 percent of the economy. Most of the progress seems to be in healthcare.
- Although the jobs data looks promising, we are facing a massive labor shortage. There are millions of positions available, but many candidates are lacking the proper training for those vocations.
Infrastructure is expected to grow.
Kuehl reported growth in infrastructure, particularly roads, bridges, airports and seaports. In terms of other sectors, energy; some domestic manufacturing, like auto and aerospace; and import sensitive industries are predicted to increase too. Healthcare will also increase with or without reform. It makes up almost 25 percent of the GDP, and demographics are driving costs here.
Recovery from the recession has been slow.
Recessions are typically marked by a big drop and large recovery. However, this time it’s making more of a checkmark shape, as opposed to a “v” shape. Kuehl predicts the current recovery should be relatively long lived.