GHBA Forecast Luncheon January 2020

Featuring Economist Elliot Eisenberg

  • Mr Eisenberg thinks the economy is slowing but not dying.
  • No bubble looming in housing or student loan debt or anything else.
  • GDP growth will slow to 2% in 2020, slightly slower than 2019.
  • Just because we are 10+ years in a growth market does NOT mean recession is imminent.
  • Mortgage debt remains slightly below the 2008 peak. Total debt is 10% higher.
  • Household balance sheets look pretty good.
  • Small business confidence remains strong.
  • Stock Market is doing relatively well despite numerous stressors.
  • Just under 17 million vehicle sales. Not a record but still solid sales.
  • US Heavy trucks sales way down, due mostly to record purchases last year (tax incentives).
  • Home improvements still on the rise but very slow.
  • US Rig count @ 676. Natural gas prices still very low.
  • There is a glut of energy and slow global growth will continue that trend.
  • Manufacturing #’s are down but is less important to economy than in decades past.
  • Non-Manufacturing economy is fine.
  • Capital goods orders are flat.
  • Service sector is very stable.
  • Tax cuts are waning and will have little effect in 2020.
  • Global growth is waning, and central banks are easing with sometimes less than zero %.
  • Trade War hurts US GDP by a half a percentage point. And will continue to do so.
  • The Dollar is surprisingly strong. @ its highest level since 2003.
  • GDP Growth is slowing but still growing.
  • GDP cannot grow fast with our weak population growth and labor productivity growth.
  • Elliot recommends having more sex and therefore more babies.
  • Best news is Elliot sees no recession.
  • US Economy still the best in the World.
  • Labor Markets are very TIGHT.
  • Historical job growth since 2000. Year over year close to 2 million new jobs.
  • Despite low unemployment, wage growth is weak but at least it is growing.
  • Inflation is non-existent. That is good.
  • Will rates rise? Elliot says not very likely.
  • Fed fund rate currently 1.625%. Elliot predicts in (2021) 1.375% and (2022) back to current 1.625%.
  • There is not enough housing! We need more, especially affordable housing.
  • Due to Government Regulations and lack of Labor, Housing costs are too HIGH!
  • Too many expensive houses. Very few are affordable.
  • Housing costs have risen 41% since 2009 and income has only grown by 8%. That is a problem.
  • Housing inventories are too low.
  • The % of low-down payment buyers (less than 5% down payment) is increasing to over 10% from 2.5%.
  • Overall, especially locally in Texas, things are good. The future looks good too.
  • All 4 major population centers look to have healthy economic conditions and futures.
  • Texas has the fastest population growth of any state in the Union.
  • Stay Calm and Keep Building!

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