“We just don’t know” how the new administration will handle the economy,  economist Bill Strauss told the joint meeting of the Southeastern Fastener Association and Southwestern Fastener Association. 

As of his April presentation, Strauss “there haven’t been major changes. There are no bills through Congress yet. There are no new trade policies.”

Strauss, of the economic research department at the Federal Reserve Bank of Chicago, noted the economy is strong overall. The U.S. economy is in its eighth year of expansion. Since World War II, the longest economic expansion chain was five years.

With no policy changes thus far in Washington, results in “making predictions uncomfortable,” Strauss observed. “Will there be trade wars?”

He did predict the U.S. economy will be “good through 2019. Unemployment will remain low.”

The GDP current expanding at 2% rate and he predicted 1.8% to 2% for the coming year.

Vehicle sales may edge down, but productivity will increase, Strauss said.

• The rising stock market is important because two thirds of stock gains get spent.

• An upcoming economic issue is the aging of the population. Those over 55 are becoming a larger percent of workforce.

• Typical workers’ income is flat.

• Oil prices were as low as $26 and are back in $50’s.  U.S. oil exports have soared and imports are down 60%.

With the exception of the energy sector, low energy prices “are good for the U.S. economy.”

• Interest rates are still low. “At some point the Fed is gong to take the training wheels off,” Strauss said in predicting higher interest rates.

• Strauss advocated doing away with the minimum wage and make pay based on production.

• Foreigners hold 60% of U.S. debt. Congress is aware of the Federal debt but will wait until panic before acting.

• Autonomous vehicles will mean fewer wrecks and fewer disabled people. But autonomous vehicles also will take away jobs – including taxi drivers, truck drivers and auto body repair.

• Education is good.  Every year of schooling a person has adds a percent to their life income.