Hunt Presents Comprehensive Overview During BAHEP's Annual
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BUSINESS to BUSINESS www.bayareahouston.com BAHEP extends its sincere appreciation for the continued support of THE DAILY NEWS through this monthly supplement. April 2019 Hunt presents comprehensive overview during BAHEP’s annual State of the Economy luncheon Harold Hunt, Ph.D., is a the EU goes down. If the thing we know about that nearly as optimistic as they Recession. research economist with EU goes down, then we go 2020 number is that half of had been. They are now the Real Estate Center down. There is a domino the economists are going to Other events that have at 1 percent located in the Mays Busi- effect, and that is why we be wrong.” affected the economy are and declining. ness School at Texas A&M are seeing so much in the Turning to the stock the government shutdown, “Business is in University in Waco. The press.” market, he stated that the the U.S./China trade nego- pretty good Bay Area Houston Eco- continued stock market tiations, the “yield curve shape,” said nomic Partnership invited What’s happening with uncertainty may begin to inversion” (The U.S. yield Hunt. him to speak at its annual U.S. economy? hurt U.S. consumption. curve inverted once again, Job open- State of the Economy Hunt then quoted Jerome After the 2016 election, the with the 10-year Treasury ings are sig- luncheon, which was held Powell, chair of the Federal market went off like a yield on March 22 dipping nificant with a on March 28, 2019, at Reserve, who said, “We’re rocket ship, said Hunt. That below the three-month T- total of Lakewood Yacht Club in seeing conflicting signals in changed around January bill yield for the first time 7,581,000 Seabrook, Texas. economic data and the fi- 2018. The trade wars and since 2007.), and the in- total U.S. job Hunt opened his pres- nancial markets.” tariffs began around Febru- creasing deficit in the fed- openings as of entation by cautioning, What does this actually ary 2018. In September, the eral budget. March 2019. Harold Hunt, Ph.D. “It’s going to start off mean? Hunt said that the market took a dive when Hunt said, “It’s Texas A&M University pretty grim. I need you to data looks pretty good, but the Federal Reserve chair- Looking at “glass half pretty tough to hang with me, because it’s the financial markets and man said that the rate in- full” economic signals have a recession going to get better at the people on the street present creases would probably Hunt then turned to the if you’ve got companies still economy should be slower end.” a different outlook. Every- continue. He later reversed positive aspects of the U.S. begging for people – not than 2018, but 2019 will He reported that the one seems to be really nega- that statement. Now the economy. The Federal laying people off.” still be a good year for global economic growth is tive, and he gave an expla- global slowdown is causing Funds Rate peaked at 19 Is it possible to have a Texas. slowing, vulnerable, and nation for this. The current concern. percent in January 1981. It recession this year? Hunt In Houston, the employ- unsynchronized. German economic expansion in the Hunt also reported on is currently at 2.25 percent. explained that it isn’t im- ment forecasts see employ- industrial production is U.S. is nearing the longest the February 2019 survey U.S. consumer confidence possible. He said that real ment increasing by 67,000 falling. The Brexit exit is a on record; so, those with a conducted by the National took a dip in late 2018. GDP would have to fall a to 71,000 jobs. The city will confusing mess, which “glass half empty” outlook Federation of Independent However, it is now lot. “To get a recession this see $2.5 billion more in strengthening, and interest- year, with GDP at 2.9 per- construction contracts ver- ingly, is stronger than it was cent last year, the GDP sus the same time last year. 12-15 years ago, according would have to drop like a Finally, as with Texas over- to Hunt. rock. Based on the hard all, an oil price in the mid- Average hourly wages are data I’ve just showed you, I $50 to $60 range per barrel finally increasing showing a just don’t see that happen- will keep the Houston 3.4 percent year-over-year ing,” he said. economy stable, according increase as of February However, he did offer a to Hunt. 2019. This has not caused caveat saying, “Consumers For Houston homeown- inflation as some may have and businesses are actually ers, they will see sales cool feared. Speaking of infla- in pretty good shape, but a bit compared to 2018 tion, the U.S. Bureau of we have to be careful. Psy- showing a projected in- Labor Statistics reports that chology is a huge deal. Our crease of 1.1 percent, be- inflation expectations over main concern is that if peo- cause there is just no inven- the next five years are still ple think there is going to tory Hunt said. quite low at an average of 2 be a recession, and they The good news is that Several of the region’s mayors attended the State of the Economy luncheon percent. Hunt said, “That is start spending and acting the price per square foot held by the Bay Area Houston Economic Partnership on March 28, 2019, at a big factor. If America like there’s going to be a will increase fairly steadily Lakewood Yacht Club in Seabrook, Texas. Shown left to right are: Mayor thinks that we are going to recession, there will be a at 4.9 percent. Jon R. Keeney, City of Taylor Lake Village; Mayor Michel Bechtel, City of have high inflation, then recession.” At the end of his 88-slide Morgan’s Point; Mayor Julie Masters, City of Dickinson; Mayor Thom Kolup- we’ll act like we’re going to presentation, Hunt closed ski, City of Seabrook; Mayor Carl Joiner, City of Kemah; and Mayor Mark have high inflation, and What’s the outlook for by saying, “And that’s it!” Denman, City of Nassau Bay. that’s really bad news.” Texas and Houston? He then answered several Turning to credit card Hunt reported that the questions from the audi- delinquencies, Hunt re- Texas employment forecast ence. increases uncertainty in the say that the country must be Business. The outlook for ported that these peaked at for 2019 should see growth (Editor’s note: Dr. European Union. Japanese due for a recession. Fifty general business conditions 6.8 percent during the averaging about 2 percent. Hunt’s entire slide presen- growth remains weak percent of economists say peaked in November 2017. Great Recession (December It was 2.3 percent in 2018. tation with many, many while Chinese economic that there is going to be a Small business was ex- 2007-June 2009). They have The Texas GDP forecast more details can be viewed growth is also decelerating. recession in 2020. Thirty tremely optimistic. That now leveled off at 2.5 per- for 2019 remains solid at 4 as a pdf on BAHEP’s web- Hunt said that the slow- four percent say the reces- outlook trended lower cent, which is lower than percent. He said that the oil s i t e a t h t t p s : / / ing of Chinese GDP sion will happen in 2021. through January 2019. Al- pre-recession. Commercial and gas sector should do www.bayareahouston.com/ (Gross Domestic Product) BAHEP members re- though the trend turned and industrial loan delin- okay with oil at the mid- c o n t e n t / growth is very much on sponded with laughter upward in February, small quencies peaked at 4.4 per- $50’s to $60’s. Overall, News_Events_and_Report the radar now and is when Hunt said, “One businesses are still not cent at the end of the Great Hunt stated that the 2019 s/reports.) “really a big deal.” This downturn began in 2010; however, he noted that the actions involving trade and tariffs plus the rate of Large regional delegation discusses legislative slowness has increased press coverage of the situation. Hunt explained, agenda with members of the Texas 86th Legislature “The fear is obviously that if China goes down, then BAHEP, along with its legislators, the lieutenant Development • Spaceport Development • Ellington Field Joint Re- partners the Clear Lake governor, and governor to • Franchise Tax Corporation and Texas serve Base Area Chamber of Com- advocate for the Bay Area • Supporting the Region’s Spaceport Trust Fund The complete legislative BUSINESS to merce and the League City Houston region’s priorities. Healthcare System • Texas Ports / Texas En- agenda is available on the BUSINESS is a monthly Regional Chamber of Com- The meetings were a huge • terprise Fund BAHEP website: https:// Bay Area Houston Coastal Spine / Taxing merce, led a delegation of success, especially meetings • www.bayareahouston.com/ Economic Partnership Authority Transportation Funding, more than 90 travelers to related to public education content/ publication in partnership • Space Alliance Technol- Bay Area Houston Trans- Austin, Texas, on March 5, and higher education. The News_Events_and_Report with THE DAILY ogy Outreach Program and portation Partnership 2019, and held 140 sched- legislative agenda included: s/reports NEWS. BAHEP is a Texas Aerospace Scholars • Maritime Jobs Preserva- uled meetings with state • Education and Workforce What has happened member-driven organiza- Program tion and Growth since the trip? TX HB303 tion that provides the was sponsored by Rep.