1. Outlook for the U.S. November 3, 2016 WWEMA
Hank Fishkind
Fishkind & Associates, Inc.
12051 Corporate Boulevard
Orlando, Florida 32817
Outlook for the U.S. November 3, 2016 WWEMA

2. Fishkind & Associates, Inc.
Yogi Berra observed, it’s tough to make predictions, especially about the future
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3. Fishkind & Associates, Inc.
U.S. Forecast Summary 2016 – 2018
2.5% +/- 0.5% Growth is as good as it gets
Strong gains in jobs and rising wages
Low oil prices and low inflation
Low interest rates even with the increases
Monetary policy – the shift to normal rates
Clinton expected to win election
Largely status quo in economic and foreign policy
More stalemate on policy and more drama
Fiscal policy shifts to mildly stimulative
Growth will accelerate a bit in 2nd half of 2016 and into 2017 and then slow a bit in 2018 as rates rise
Main forecasts risk: (1) Election, (2) Geopolitical risks, (3) weaker global growth, and (4) effects of higher interest rates
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4. RECENT TRENDS IN GDP AND INFLATION
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8. Low Growth Trajectory for Real GDP Unlikely to Change
Fallout from Great Recession
Increased regulation
Lower risk tolerance
Globalization
Holds down prices
Holds down wages
Income Inequality
Underestimate GDP
Investment in Tech
Consumption Social Media
Current mix of monetary and fiscal
Policies will yield +/- 2.5% Growth GDP
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Average = 635
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Core averages 2.2%
Year over Year in 2016
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23. Economic Policy Issues in a World of Structural Change
Transformational forces
Globalization/Trade
Automation/Artificial Intelligence
Migration
Slow economic growth / low demand
Distributional issues for those left behind / political & economic issues
Debt and structural issues in the budget
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24. Fishkind & Associates, Inc.
Average Outlays
Average Revenues
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25. Long Term Economic Growth
% GDP = % Productivity % Population
1.8% to 1.75% GDP
0.8% to 1.5% productivity
1% to 1.25% population
Investment in human & physical capital
Reform entitlements and healthcare
Revise immigration policy
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28. Fiscal Policy Assumptions
Largely status quo
Debt ceiling and budget approval
Lots of drama but passage likely
Too much political damage from failure
2013 shutdown damaged Republicans
Sequester returns in FY 2018 but budget deal probably trumps sequester
Stalemate on most issues except for:
Infrastructure financing $275 billion
Minimum wage increase
Tax reform lite
Lower corporate taxes
Buffet Rule – floor on minimum tax rate
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INTEREST RATES
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30. GDP Growth (Percent growth SAAR)
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31. State and Local Spending on Infrastructure $2014 M
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32. Government Spending on Water/Wastewater $2014
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33. Government Spending on Water/Wastewater $2014
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34. Spending on O&M Outpaces Capital Investments
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35. State & Local Governments Make Most Investments
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36. Outlook for Spending on Water/Wastewater Systems
Positive outlook near term
State/local revenues improving
Economic expansion likely to continue
Interest rates remain very low and credit readily available for infrastructure projects
Federal infrastructure spending to rise
Long term outlook positive
Lengthy history of rising real expenditures for water/wastewater projects
U.S. public and private infrastructure needs substantial new investment
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The End
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