Credit unions are in the “best sector” of a robust economy, Wall Street guru Peter Ricchiuti tells attendees at the CUNA CFO Council Conference in Orlando.
“We’re adding 200,000 jobs a month,” he says. “Consumer confidence is at a 15-year high. Loans are rising. You are in the best sector of the economy."
Other highlights from Ricchiuti’s presentation:
• Investors are hot and cold on the Trump administration. They like cuts to corporate tax rates, deregulation, and increased infrastructure spending.
But they're not keen on protectionism, import tariffs, and immigration restrictions, which make it hard to fill key jobs and limits innovation.
• Unemployment is below 5%, which is considered to be full employment. “There’s very little slack in the economy right now, Ricchiuti says. “If the economy improved any more we really don’t have [enough] workers."
In fact, he says, 89% of manufacturing job losses are the result of improvements in efficiencies, automation, and robotics. “That’s good news for American robots,” he says.
• Electric cars are a game changer. Volkswagen, Mercedes, and BMW announced that by 2030 they will no longer make internal combustion engines.
This will have a huge impact on the oil industry, Ricchiuti says. Seventy percent of oil is used for transportation.
• The current drop in oil prices has been a huge boon for U.S. consumers.
“Lower prices at the pump are the equivalent of a $200 billion tax cut for U.S. consumers,” Ricchiuti says.
• The economy will experience wage inflation of 3% to 4% in the next 12 to 18 months. “People have to be adjusted to it,” he says. “We haven’t seen inflation in a long time."
Ricchiuti notes the effect on the bond market could be especially significant.
• Just one in eight U.S. workers is of normal weight and without a chronic health problem.
“You can be for Obamacare or against Obamacare, but we’re not doing a very good job of taking care of ourselves,” Ricchiuti says.
►Click here for more conference coverage from CUNA News, and get live updates on Twitter via @AdamMertzCUNA, @cumagazine, and @CUNACouncils, and by using the #CFOCouncil hashtag. Learn more about the CUNA CFO Council, a member-led professional society for credit union executives, at cunacouncils.org.