The national, state and local economies will perform strongly into early 2019, but watch out for 2020, when a recession and interest rates hitting 8 percent could hit, economist Hank Fishkind said Thursday.
Fishkind made his remarks to a crowd of 400 who gathered for a breakfast meeting of the Bradenton Area Economic Development Corporation held at Manatee Technical College.
“Tax cuts and the Job Act will have a significant impact,” Fishkind said, adding that they could overstimulate the economy and help intensify the next recession when it arrives.
Tax cuts will make a difference in consumer spending, but will also add $1 trillion to the national deficit during the next decade, he said.
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The stimulus is “ill-timed,” coming at a time when the national economy is already at full employment, Fishkind said.
The economy will grow at 3 to 3.5 percent in 2018, and will cause pressure on wages and prices, he said.
Fishkind’s wide-ranging predictions also touched on the Trump presidency, climate change, immigration, technology, and the Puerto Rican exodus to the Florida caused by hurricane devastation in 2017.
Trump will not junk the North American Free Trade Agreement or the Iranian nuclear deal, and will be unable to build the wall between the United States and Mexico, Fishkind predicted.
Tax cuts and the Job Act will have a significant impact.
Economist Hank Fishkind
Some other thoughts from Fishkind:
- Climate change is already having an impact in Florida. Flooding in Miami and Miami Beach is a growing problem. Streets can be raised above the flood level, but what about all the homes?
- The United States needs immigration because it cannot fill all of its job needs with the country’s current birthrate. Puerto Rico most likely will contribute 500,000 new residents to Florida as a result of hurricanes there.
- Artificial intelligence and self-driving vehicles will have a major impact on the trucking industry, which employs 200,000.
Fishkind also took aim at Florida Gov. Rick Scott’s budget, which he said doesn’t meet the state’s needs and shows no per capita growth.
But the economist had words of praise for Manatee County and the work it has done to diversify its economy beyond tourism and agriculture.
Sharon Hillstrom, president and chief executive officer of the Bradenton Area Economic Development Corp., said the EDC since 2009 has assisted in 70 business relocations and expansions to create 4,546 new, higher paying jobs. More are in the pipeline, she said.
After the meeting. several attendees said they took note of Fishkind’s predictions and cautions.
“These next couple of years will be productive, but we need to pay attention as the interest rates rise,” Ron Allen of NDC Construction said.
Jonathan Fleece, managing partner of Blalock Walters, P.A., said everyone needs to be cautious and thoughtful moving forward into 2018.
A recent report that credit card debt had hit a record is concerning, Fleece said.
“So much of the economy is driven by consumer spending and confidence,” Fleece said.
Dom DiMaio, regional CEO of Synovus Bank, said 2018 and early 2019 will be a good economic time, “Then we’ll see how the interest rates affect the economy.”