2017-07-14 / Business

Economy is improving under Trump, economist says

By Becca Whitnall

Sung Sohn Sung Sohn The economy under President Trump is doing just fine—maybe even better than fine.

That was the message shared by economist Sung Sohn of Cal State University Channel Islands at the Greater Conejo Valley Chamber of Commerce’s economic forecast June 23.

“We all know it’s been less than six months since the inauguration, and if you look at the stock market, it’s done very well,” Sohn said. “It’s hard to tell there’s turmoil in Washington.”

Sohn, who the Wall Street Journal has consistently named among the nation’s most accurate economists, said a number of positive indicators support his claim, including the S&P 500, consumer confidence surveys and the nation’s low unemployment rate.

One of the interesting—though perhaps not as scientific—predictors of how well an economy will flourish under a president is how the stock market does the day after an election, Sohn said, citing another professor’s study.

Since President William McKinley (1897-1901), 64 percent of the time there has been a correlation between the two.

“That’s not (looking at) a week . . . a year—just one single day, Wednesday,” Sohn said. “Let’s see what happened with the stock market on the Wednesday after the election of Mr. Trump: (It) jumped by 257 points.”

But despite all of the positive indicators, there are concerns, referred to as the “surprise index,” the economist said.

Chief among these, Sohn said, is fear that the Federal Reserve could raise interest rates too high and too quickly. For seven years, beginning in 2008, the Federal Reserve’s benchmark rate—which affects everything from credit cards to mortgages— remained at 0.25 percent due to the recession. It was increased to 0.5 percent in December 2015. Since then, it’s risen three more times, with the most recent taking place June 14, when it climbed to 1.25 percent.

Concerns also include “the Trump Agenda,” Sohn said, which touches on repealing the Affordable Care Act, foreign trade, deregulation, the federal budget and geopolitical hot spots.

Though the Chamber’s annual economic forecast typically addresses the regional economy, more recently it’s been taking advantage of the access to renowned economic experts to look at the broader picture, said Jill Lederer, Chamber president and CEO.

“We have such great experts who we can call on from places like CSUCI,” she told the Acorn after the event. “The last five or six years, we’ve really reached out to get the finest speakers and economists because we have local businesses but we’re part of the bigger world.”

Google’s Brendan Jacobson, manager of strategic partnerships, spoke during the forecast about the need for businesses, small and large, to adapt to the new digital age.

“There’s one thing we’re hearing across the board: Mobile is changing everything,” he said.

For example, online shoppers aren’t stuck at home on a desktop computer but might be in a store comparing prices or out and about and looking for a store that has an item in stock.

Jacobson said that Google searches have reached the point where more than half of the 3 billion daily searches it fields come from mobile devices, and the company expects the trend to grow.

Google has conducted studies that show each owner of a mobile device looks at his or her phone 150 times a day on average and spends nearly three hours a day on it.

“Mobile isn’t going to happen, mobile is not happening, that shift has already happened,” Jacobson said.

Lederer said the Chamber expects to host a speaker from Amazon next year.

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