By Callan Smith | Rose Law Group Reporter
Pinal County got a much-needed shot in the arm with the arrival of Lucid Motors and motorsport, said Elliott Pollack, local economist and real estate consultant at the annual Pinal Partnership breakfast Friday. The county needs an economy that spurs jobs, he said PhoenixMart, which is under construction has the potential to create a lot of jobs and could boost housing permits.
Looking nationally, expectations under a Trump Whitehouse and the Republican House and Senate are faster GDP and job growth, higher interest rates, higher but not traumatic inflation, infrastructure spending, larger military and higher tax profits. However, the wildcard is what will happen with international trade because the last thing the U.D. can afford is a trade war, Pollack said.
The U.S. is in the slowest economic recovery in American history at 90 months, and “historically the deeper the recession the stronger the recovery because you have more pent up demand. That is a function of policy,” said Pollack, who predicted the odds of getting through the next four years without a recession, even a mild one, are zero.
There are four things a president needs to do to spur growth: lower taxes on the rich, lesson burdensome and capricious regulation, reduce barriers to credit creation, reduce barriers to international trade and reduce companies’ ability to influence Washington to get ahead of their competitors, Pollack said.
However, he said no president has tried all that at this point in an expansion with a labor force that is getting close to full employment.
Some positives include flat credit-card debt and improving consumer liquidity along with growing net worth and government isn’t a drag on the economy. However, student loan debt is a continuing problem, especially for millennials, who entered a job market without opportunities.
The number one reason why adults age 35 or younger don’t buy homes is student loans, and it’s going to take them a while to pay down their debt to afford a house,
Narrowing the focus to Arizona, Pollack said the state is in a better place now, ranked seventh among the 33 labor markets in the U.S., but it’s subpar when compared to pre-recession when the state ranked first. As Phoenix’s unemployment rate gets lower, the population will begin to grow, Pollack said. Going through the demographics it looks good for housing. The Average number of housing permits in the greater phoenix area over the next ten years will be at 34,000 per year, that’s assuming the labor force is there to build the homes, said Pollack.
The housing recovery will continue with permits going up, and “things are going to get better under Trump unless he becomes too dogmatic about trade,” Pollack said.