Starting the Consensus Revenue Estimating Conference (CREC) to estimate our state's revenue for the next budget. You can watch here:
house.mi.gov/SharedVideo/Vi…
Consumer confidence & manufacturing indexes expecting a slow down. Unemployment trending down in the short term. Economic growth in 2018 largely due to economic stimulus. 2018 saw some wage growth. #mileg #crec
Talking about the impact of the shut down: we could see $120 billion in sequestration cuts kick in automatically. Cutting economic stimulus while we are slowing down puts on the breaks faster.
About 380,000 furloughed federal employees and 420,000 working without pay. Today is the first day many are missing a pay check. The Trump shutdown is hurting real families. The economists here predict another week of shut down but admit that may be optimistic.
This chart is troubling. Once the short term economic stimulus is done and especially if Trump tariffs stick around, real GDP growth slows. What that means is that we're going to be paying China on the Trump tax debt for years (1.5 Trillion+) while our economy slows down.
One key thing to watch: the report due in February on whether tariffs should be enacted on EU and Japanese vehicle imports.
Here's another powerful graph. Vehicle sales slowing slightly, but the Big Three share of total vehicle sales will continue to decrease. Estimates is that the GM layoffs will likely result in 16,000 lost jobs at GM and impacted businesses.
Good news: estimates are inflation staying relatively low. This could help wage growth moving over the next few years.
Closing thought from the U of M economists, the international trade situation is the greatest risk to Michigan's economy.
Up next, Joel Prakken, PhD, CBE. His talk is titled, "Anticipating the Next Recession: A Probabilistic Approach." Now we're examining the likelihood of a recession within the next two years.
Long story short: most economic forecasts are too rosy based on historical fact patterns. We need a way to incorporate our learning from history into our future predictions.
Interesting note: Michigan hasn't had general fund revenue higher than $10.7 billion since 2000. We were over that in 2018, but will be right below it in 2019. However, to keep up with the purchasing power of $10.7B from 2000, we'd have to have $15.5B. #mileg #crec
For everyone waiting on pins and needles, here's the consensus estimate. It was adopted unanimously. That's a wrap on the January 2019 CREC! #mileg #crec
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