Naperville panel encourages continued economic caution
This year's economic outlook is much the same as last year's - but for different reasons, panelists at an annual Naperville Area Chamber of Commerce event said Thursday.
Uncertainty about the presidential election, continued slow economic growth and almost nonexistent inflation are all factors preventing full-fledged optimism these days, panelists said during the Regional Economic Forecast at Hotel Arista.
Last year, it was limited labor force growth, "antiquated" business tax policies and uncertainty about a future interest rate increase.
But the result is the same - what chamber President and CEO Nicki Anderson called a "cautiously optimistic" prediction for a year ahead that likely won't fall into a recession but won't bring runaway growth, either.
Moderator and personal finance expert Terry Savage said positive factors about the nation's economy include stock values close to all-time highs, a strong dollar and indications the U.S. Federal Reserve will implement an interest-rate increase after the Nov. 8 election.
"The Fed will have very little excuse not to raise rates in December," Savage said.
That would be good news to panelist John Calamos Sr., founder, chairman and global chief investment officer of Calamos Investments. He said market volatility remains likely, so he would welcome an interest-rate increase to spur investment and make banks more willing to lend money.
"We need a much more normal interest-rate environment," he said.
But first comes the election, looming less than two weeks away. Panelist Blu Putman, managing director and chief economist of the CME Group, said one thing's for certain about the economic response to the nation's choice of Democrat Hillary Clinton or Republican Donald Trump for president.
"All hell will break loose either way," he said. "The surprise is the outcome of the vote, but not the reaction."
Panelist Caroline Harris, chief tax counsel and executive director of tax policy for the U.S. Chamber of Commerce, predicted that the government won't accomplish much in President Barack Obama's lame-duck session between the election and his successor's inauguration. That means national tax policies likely will stay the same until at least the spring, when the new presidential administration puts forth its proposals.
Business leaders among about 160 people in the crowd voiced worries about increases in the minimum wage, skills gaps between worker qualifications and industry needs, and trends toward millennials renting instead of buying homes.
Thomas Herman, CFO at Calamos Investments, runs a Naperville- and Wheaton-area chief revenue officer roundtable to help sales leaders address challenges and said he attended the forecast for perspective on how national trends affect regional decisions that determine local conditions.
"What I'm looking for," Herman said, "is the broader picture of what's going on."