Last week I attended a technical staffing conference and one of the more interesting keynotes was from economist Alan Beaulieu of ITR Economics. If you've heard an economist speak you know they like to use charts & graphs and usually leave you wondering if you should prepare your doomsday castle. The good news Alan had for us was technology is going to continue to be an industry with high growth and high demand for the foreseeable future. He pointed to several factors to remain optimistic about our economy overall:
- Leading indicators are pointing up.
- The government & Fed continues their stimulative monetary policy.
- Employment is rising (companies right‐sized).
- Banks are lending.
- Retail Sales are rising.
- Construction is improving.
- Deficit spending continues.
While you can argue continued deficit spending is just kicking the can down the road, it does provide reasons for short-term optimism. Other positive indicators in the marketplace included dropping delinquency on consumer debt, rising manufacturing, and an abundance of natural resources (especially natural gas) within our borders. However, as all economists tend to do, he gave us the good news first. He feels there is cause for concern in 2014 because of • Stagnant wage growth and ongoing high unemployment.
- Food, fuel and rent inflation.
- Higher payroll and Affordable Care Act taxes.
- An unclear deficit reduction plan.
- A looming bond and stock bubble.
The ACA is a hot button with a lot of people, and there's no doubt it's going to result in higher taxes, but when you look at the increase vs. the GDP there's been many other pieces of legislation with greater impact including the "Read my Lips, No New Taxes" Bush increase in 1990 and the Clinton increase in 1993. Even Reagan's increase in 1982 was a higher percentage of GDP than ACA.
The take-away was that 2014 is going to be a year where we'll see little growth, with the possibility that there will be a small set-back as people and companies adjust to the new healthcare law. Overall he was optimistic about things over the next 15 years. Which is good news for everyone.
