Economic Stability in ‘Good Standing’ For Hampton Roads
July 24, 2017
The federal government's political uncertainty hasn't impacted long-term trends in the economy so far, said Old Dominion University economist, Robert McNab.
McNab gave the Trump administration an incomplete grade for effectiveness during the president's first six months in office.
Since February, 863,000 jobs (nationally) were created under the Trump Administration and experts say they hope the recovery will continue.
"We've seen the markets increase," said McNab, the deputy director of Old Dominion's Center for Economic Analysis and Policy. The upward job trend is obvious locally. Over the past six months, Hampton Roads' unemployment rate declined 0.5 to 4.2 percent, which added thousands of new jobs to the area.
Right now, Congress is debating the budget for fiscal year 2018 which is scheduled to start Oct. 1. McNab said a key part of the budget, that would be highly beneficial to the Hampton Roads, is an increase in defense spending.
"It's very positive for Hampton Roads because it would lead to increased operations, manpower, ship building and maintenance," he said. "All of this would contribute to our local economy."
McNab noted that despite the economic boost, he's grading the president's six-month economic progress with an incomplete grade because it's too early to connect policy outcomes with market strength.
"There hasn't been any legislation passed that would affect the markets," he said, referring to the government's debate on healthcare, discussions of negotiating trade agreements; tax reform; infrastructure policy; increasing deregulation and other issues.
McNab said an increase in political dissention would likely hamper the ability of the president to pass significant legislation in the short-term.
President Trump has stated that he wants to create 25 million jobs over a 10-year period while increasing economic growth to 4 percent. McNab said that statement is "unrealistic" because sustaining even a 3 percent growth rate is difficult.
"That's a significant concern because the president's budget is built on the assumption of a 3 percent growth rate and if he doesn't achieve that then the deficit will get significantly worse. Gross Domestic Product growth is relatively anemic and currently averaging less than 2 percent," he said.
McNab said the future state of the economy will depend on what long-term decisions are made now in Washington.