After tax cuts and increased spending measures have passed through Congress, business economists are expressing optimism that there will be accelerated economic growth over the next two years. This is according to a survey conducted by the National Association for Business Economics. NABE projects that the economy will grow 2.9 percent this year, the best growth in the past three years. Just three months ago NABE was predicting only 2.5 percent growth.
NABE updated their prediction after Trump’s $1.5 billion tax cut passed through Congress successfully and legislatures agreed to raise the budget for military and domestic programs by $300 billion over the coming two years.
NABE forecasters believe that the tax cut and spending increase will increase economic growth by 0.45 percent this year, and 0.3 percent next year.
“In large part, the increase in growth prospects appears related to federal fiscal policies,” said David Altig, chairman of the NABE forecasting group and the director of research for the Federal Reserve Bank of Atlanta.
Trump officials claim that the administration’s economic policies will speed growth to annual rates of at least 3 percent. Most economists doubt this is possible. Many analysts believe that economic growth is more likely to be about 2 percent per year for the next ten years.
Many US states are benefiting from the upward movement of the economy and a renewed improvement in investments. States that want to maximize the rewards of this economic upturn are working hard to attract both foreign and domestic money.
One state that is doing its utmost to attract investment is Kentucky, a place in middle America that lost a lot of jobs in coal and manufacturing over the past 20 years. This year that state is seeing a record amount of investments. Officials announced that Kentucky invested $9.3 billion in corporate investment last year, leading to the creation of 17,000 new jobs, the most since the year 2000.
The state is confident it can continue to create jobs in the future. It has a skilled workforce and a growing business climate, according to Governor Matt Bevin.
“We have a great workforce. I have invested $250 million in workforce development in the last two years,” Bevin said.
Every year US News & World Report assesses the 50 US states for a variety of characteristics such as health care, education, economy, opportunity, infrastructure, crime, fiscal stability and overall quality of life.
Several years have passed since the US fell into the worst recession since the Great Depression of the 1930s. From 2007 to 2009 unemployment climbed past 10% at its worst, with some states doing even more poorly. Now unemployment stands at about 5% nationwide, although the recovery is not experienced in every state equally. The US News & World Report survey shows some states have only 2% unemployment while there are other states with 7%.
Growth of the US economy, as measured by the gross domestic product, was 2.6% annualized in 4Q of 2017, below that of the previous quarter. This number is also lower than the annual average from 1947 through 2017. There are political leaders who would like to see GDP reach 4%.
The following states did the best in the rankings for 2017:
1. Colorado: Ranked 4th for growth, 3rd for employment and 3rd for business environment.
2. Utah: Sixth for growth, 4th employment and 5th for business environment.
3. Washington: First for growth, 24th for employment, and 4th for business.
4. California: Fifth for growth, 29th for employment, and 1st for business environment.
5. Florida: Second for growth, 32nd for employment, and 7th for business environment.
Fulfilling one of his campaign promises, US President Donald Trump will uncover his plan for rebuilding the country’s infrastructure this week. The plan will cost US taxpayers $1.5 trillion, but is heavily dependent on state and local funding sources.
The plan will centerpiece a $200 billion pledge from the federal government which will be used to leverage money from cities and state budgets which will earmark them to roads, highways, ports, airports and more.
“Every federal dollar should be leveraged by partnering with state and local governments and — where appropriate — tapping into private sector investment to permanently fix the infrastructure deficit,” Trump said at last month’s State of the Union address.
Trump has said many times that the deteriorating roads and highways are holding the country back from faster expansion of the economy. Some lawmakers and others say that this issue should have been dealt with last year and Trump’s first big push in Congress, instead of the health care issue. Infrastructure is a bipartisan issue that would have helped create a more unified Congress.
The plan was previewed by administration officials as containing two key components: funding for new investments which will help speed up repairs on crumbling roads and airports; and a more efficient way for projects to get the permits they need, so projects can get underway faster. The officials added that the $200 million will come from cuts in other programs.
In recent news, ECS Federal has been acquired by On Assignment. The deal is said to have come to $775 million and brings On Assignment into the federal market. As Roy Kapani, ECS’ majority owner and founder said,
“This is a terrific outcome for our company, partners and talented employees.”
ECS CEO George Wilson said, “Same strategy, same management team, more resources.”
On Assignment has big plans with the acquisition. They will change their name when the deal finishes to be ASGN Inc. They hope that ECS will become a $1 billion platform by the target date of 2021. ECS will now have access to digital, creative and life sciences; while On Assignment will have access to ECS’s development capabilities and cloud, cyber and artificial intelligence.
The acquisition is an interesting example of a commercial company that is turning its attention to the federal market. As investment banker Jean Stack of Baird explained,
“This is illustrative of strong buyer interest in companies with scale and demonstrated growth, with priority national security customers, and in growth markets like cyber, analytics and IT modernization.”