Browse presentation slides from Breakfast with the Economists 2018,
held on June 6th, 2018, in Tucson, Arizona.
George W. Hammond, Ph.D.
Director and Research Professor, Economic and Business Research Center
Jesus Cañas
Senior Business Economist
Federal Reserve Bank of Dallas
Sponsored by
The buzz about the local economy remains solid, but there are clouds on the horizon.
Tucson’s job growth was steady last year, at a rate near the national pace, but well below the state. The Federal Reserve continues to raise interest rates, which could undercut improving construction activity. In contrast, federal fiscal policy is steaming ahead with large cuts to personal and corporate income tax rates, which are expected to boost household spending and business investment. In addition, Arizona has launched an ambitious effort to boost incomes through increases in the state minimum wage.
The federal government is also pursuing controversial trade policies, ranging from the renegotiation of NAFTA to stiff new tariffs on imports of steel and aluminum, which could adversely impact international trade. Further, many economists believe that NAFTA contributed to a major increase in cross-border trade during the past 30 years. Will the renegotiation of the treaty accelerate U.S. trade with Mexico or will it be a major speed bump?
There are important policy changes around nearly every corner. What does it all mean for Tucson? Will the local economy sustain steady gains next year? Or will headwinds from rising interest rates, stock market volatility and trade uncertainty push Tucson back into the doldrums. What are the odds that the tax cuts will put new life into local growth, perhaps with a tailwind from increased defense spending?
