CEO: Economy purrs along slow, steady
Head of Fulton Financial Advisors says it will be hard for a dramatic shift into overdrive, however
DOWNINGTOWN » For those who like speed, the upcoming economy won’t be for you.
But for those who are fine with slow and steady progress, this economy will suit just fine.
That was the takeaway from a presentation by David B. Hanson, CEO of Fulton Financial Advisors, to members of the Western Chester County Chamber of Commerce on Wednesday at the Downingtown Country Club.
Comparing it to a car, Hanson said the economy had been traveling at about 35 mph since the recession. That figure has bumped up to about 40 mph since the election of Donald Trump, due mainly to expectations for improved conditions from small businesses and consumers.
Still, Americans are used to cruising at 60. “Now, the rest of the world is going 35 to 40, so we don’t feel so good,” Hanson added. Apart from the problems in Washington, where budget deficits and debt continue to grow, “we’re actually in pretty good shape,” Hanson said.
America is now 99 months into its recovery from the last recession, the third-longest recovery sine 1900.
“But it’s been a really weak recovery,” Hanson conceded, adding, “I’m not seeing a recession coming any time soon.” Instead, it appears the economy is in mid-
recovery, he said.
There are demographic factors keeping the economy from growing at a faster rate, and those don’t appear to be improving anytime soon.
A key element in increasing the nation’s gross domestic product is the number of working aged people contributing.
With an aging population, increased automation and a crackdown on immigration, it seems unlikely there will be enough workers to increase productivity as much as they did in past decades, the economist said. “We haven’t gotten there recently,” Hanson said. “But remember, I’m the guy who told you last year Trump would never get elected.”
As a cautionary example, Hanson pointed to Japan, which has almost no immigrants and where 27 percent of the population is over 65.
Overall, the economy is fine, with unemployment back down to low levels. The initial euphoria from business at the Trump election may be fading, however, as time passes without legislative accomplishments. But it would have to grow faster than it has in decades to be able to handle the tax breaks being proposed by Trump in a deficit neutral way. There aren’t many ways Hanson can see that happening, but one would be a reemergence of that post-election bullish attitude.
“Small business optimism soared initially,” Hanson noted. “Now, small businesses are saying, ‘show me the money.’ If they can be reengaged, maybe we can get to 60.”
But Hanson, who also is CEO of Clermont Wealth Strategies, isn’t betting on it. He is predicting economic growth in the 2 percent range, with adult reeducation, healthcare and technology being hot sectors in the economy.