Posted on 01/26/2017 by David Radke
The trucking industry should expect slow, sustained growth in the upcoming months and years.
Before the 2016 presidential election, the Federal Reserve Bank of Chicago stated the economy is likely to grow in 2017. However, the Chicago Fed also cautioned that growth won’t be anything substantial.
Overall, the U.S. economy had a pretty positive 2016. According to the U.S. Bureau of Labor Statistics, 2.2 million jobs were created and unemployment dipped to 4.7 percent toward the end of the year.
But during the recent Heavy Duty Aftermarket Dialogue conference in Las Vegas, Chicago Fed Senior Economist and economic advisor Bill Strauss had some caution for attendees.
During his remarks, Strauss said current economic growth is the third-longest positive run in U.S. history, Fleet Owner reported. And that growth will continue, but maybe not as strong as some trucking industry or economic experts would like.
“We haven’t altered our forecast materially, but we do see an upside risk in economic growth,” said Strauss. “There’s a better chance of it being stronger than of it being weaker.”
As such, the central bank predicts slow and steady GDP growth throughout 2017. The Fed believes the GDP will increase by just under 2 percent. If this occurs, according to Strauss, the U.S. will likely be in the midst of the largest economic expansion in its history.
What’s on the horizon?
With a new president, the trucking industry is curious to see what the future has in store. President Trump’s proposed tax plans would have far-reaching effects, according to NPR. Trump wants to cut the corporate tax rate to 15 or 20 percent from its current 35 percent.
Additionally, regulations have an impact on economic growth. Trump believes regulations hamper business investments; however, it remains to be seen how the desire to cut rules and regulations will impact trucking. Changes to those two areas will undoubtedly cause ripple effects in the trucking industry.
“But I think we’re in the 8th or 9th inning of getting the labor market back to where it should be,” said Strauss.
Many trucking companies haven’t returned to their pre-recession employment levels, but they’re getting there.