image title

Experts see steady economy in 2017 under Trump

Experts predict stable economy in 2017 under Trump at ASU forecasting event.
December 5, 2016

ASU economic forecaster predicts that Arizona will see more jobs added

Despite a wild and unpredictable campaign season, three top economists predict a stable — and potentially positive — economic outlook for 2017 under Donald Trump, who will be sworn in as president in January.

Unemployment and inflation will likely remain stable, and any policy changes wouldn't have big effects until 2018, according to experts at the annual Economic Forecast Luncheon on Monday, sponsored by the W. P Carey School of Business at Arizona State University and JPMorgan Chase and Co.

James Bullard, president and CEO of the Federal Reserve Bank of St. Louis, predicted that the most immediate economic changes could be seen with Trump’s promises to deregulate businesses, spend billions on infrastructure and reform taxes.

“If you think there’s been over-regulation of unwarranted regulations, you could see improvements in productivity, but regulation is a vast area that covers many different aspects of how businesses operate,” he said to the 700 people who attended the 53rd annual luncheon in Phoenix.

“The U.S. growthThe U.S. economy is growing at about 2 percent – a figure that Bullard predicts will hold for 2017. rate is low, but it could be influenced by those policy changes.”

But Bullard said that changes in trade agreements or immigration policy would likely take much longer to have an effect on the American economy.

He also said he was not concerned about remarks Trump made during the campaign that called into question the credibility of the U.S. Federal Reserve, which sets monetary policy.

“Trump’s transition team has said they’ll respect the Fed, and I take them at their word that ultimately they will endorse the current Fed structure and that we’ll be able to continue to deliver good monetary policy under a new administration,” he said.

Another economic expert predicted that if Trump decreases the corporate tax rate, as he’s promised, it could drastically increase profits — though not right away. Anthony Chan, the chief economist for JP Morgan Chase and Co., said the current corporate tax rate is 35 percent — although the average rate that corporations actually pay is closer to 27 percent.

“If the corporate tax rate is lowered to 15 percent, it has the potential to boost corporate profits by 19 to 20 percent,” he said. “But I’ll be the first to tell you that it won’t happen in 2017.”

Chan also said that Trump’s plan to allow corporations to repatriate profits made abroad could potentially raise $160 billion in revenues, which could pay for his infrastructure plan.

“As investors it’s not our job to say ‘this is good or this is bad.’ It’s our job to set our portfolios to benefit from these things,” he said.

Lee McPheters predicts more jobs for Arizona next year, but he worries about long-term indicators.

The outlook in Arizona is positive for next year — with some ominous long-term economic issues, according to Lee McPheters, research professor of economics in the W. P. Carey School of Business and director of the school's JPMorgan Chase Economic Outlook Center, which specializes in economic forecasts for Arizona and the Western states.

McPhetersMcPheters is editor of the Arizona Blue Chip Economic Forecast and the Western Blue Chip Economic Forecast newsletters, published monthly by the center. showed that of five economic indicator forecasts he made a year ago, three were better than predicted. There were 76,000 new jobs, compared with 68,000 predicted. The employment increase was more than expected — 2.9 percent increase in jobs compared with 2.6 percent predicted. And the unemployment rate was better than forecast — 5.2 percent compared with 5.8 percent.

The two indicators that were not better than McPheters predicted were population, which increased by 1.6 percent compared with the forecast 1.7 percent, and single-family housing permits, which increased 10 percent, not the 30 percent he forecast.

“If you look at Arizona’s numbers, we’re pretty certain as we wrap up 2016, we will definitely be in the top 10, and maybe the top 5, nationally for private job creation, and we expect that to continue in 2017,” he said.

Even with the positive projections, Arizona is below the national average in other measures of economic prosperity. The state ranks 42nd in per-capita income and 45th in poverty. The state also ranks last in per-student funding for universities.

“We need to look at policies that propel Arizona to look more like Colorado or our neighbors who have made the transition to using technology to increase income,” he said.


Top photo: James Bullard, president and CEO of the Federal Reserve Bank of St. Louis, predicted that the most immediate economic changes could be seen with Trump’s promises to deregulate businesses, spend billions on infrastructure and reform taxes. He spoke at the Economic Forecast Luncheon on Monday, sponsored by the W. P Carey School of Business at Arizona State University and JPMorgan Chase and Co. Photo by Charlie Leight/ASU Now.

Mary Beth Faller

reporter , ASU Now


image title
Kate Spencer says fellow Sun Devils should stay focused as they pursue degrees.
December 5, 2016

Kate Spencer is leaving her mark on the biochemistry world — thanks to picking field through happy accident

Editor’s note: This is part of a series of profiles for fall 2016 commencement. See more graduates here.

“Transdisciplinary” means applying one field of knowledge to another. It’s a hallmark of Arizona State University. Sometimes it’s on purpose: “What if we applied economic theory to avian social behavior?”

Sometimes it’s by accident with a happy result, like the microwave and x-rays.

That would describe the experience of graduating senior Kate Spencer, a Tempe resident graduating with a major in biochemistry from the School of Molecular Sciences and a minor in anthropology from the School of Human Evolution and Social Change. Her field was chosen through happenstance (see first question in Q&A below).

Kelly Knudson, associate director of the SHESC and director of the Archaeological Chemistry Laboratory, discussed Spencer’s work in the lab applying biogeochemistry to anthropological research questions.

“Kate Spencer exemplifies ASU’s commitment to transdisciplinary research,” Knudson said. “Through her senior honor’s thesis research in the Archaeological Chemistry Laboratory, she combined both archaeology and biogeochemistry to better understand how the environment, particularly altitude, affects different isotope systems. The ACL and SHESC have a long commitment to undergraduate research, and it is so fulfilling to be able to work with amazing undergraduates like Kate.”

Question: What was your “aha” moment, when you realized you wanted to study the field you majored in?

Answer: When I chose it, I couldn’t decide between biology and chemistry, so I just picked biochemistry. I realized it was its own subject, but then I just kind of stuck with it.

Q: What’s something you learned while at ASU — in the classroom or otherwise — that surprised you, that changed your perspective?

A: I took a medical anthropology class in SHESC. It was online. We learned about how different societies and countries view medicine. We had to read a book about a family living in American who had come from Taiwan or something like that. Their daughter had seizures. Of course the American doctors know the science behind epilepsy, but (the parents) didn’t believe any of that. They thought it was her spirit leaving her body. It was really interesting to see how other people can think of things like that, especially with me wanting to be a doctor. That was definitely an eye-opener.

Q: Why did you choose ASU?

A: In-state tuition. Am I allowed to say that? I wanted to pick something cheap because I knew I wanted to go out of state to med school later.

Q: What’s the best piece of advice you’d give to those still in school?

A: Stay focused. That’s something I was good at it, but I definitely see other people struggling to stay focused on their studies. Why blow it now?

Q: What was your favorite spot on campus, whether for studying, meeting friends or just thinking about life?

A: The Secret Garden.* My parents used to teach here, so I’d sometimes come with them and watch them teach, but we’d always go there on the way out. So, I’ve been going there since I was little.

Q: What are your plans after graduation?

A: I’m planning on going to med school. I don’t know (what kind of doctor I want to be). For now, I work in the emergency department at Chandler Regional and Mercy Gilbert as a scribe, so I’ll keep working. I follow doctors around and do all the charting information, so they can focus on the patient. Next summer I’ll start applying to med school. That’s like a year-long application process. That’s the plan.

Q: If someone gave you $40 million to solve one problem on our planet, what would you tackle?

A: Forty million dollars probably isn’t that much to deal with any problem. Maybe providing vaccinations to Third World countries. Often they have the drugs, but because Third World countries don’t have electricity, they can’t store them. These things have to be refrigerated, so a lot of times the vaccines go to waste because they expire in the heat before they can be used. That would be interesting to work on.


*If you don’t know where the Secret Garden is, you’re not a Devil yet. Ask around.


Top photo: Kate Spencer poses in an anthropological chemistry lab, on Nov. 30, where she completed her Barrett thesis. Photo by Charlie Leight/ASU Now

Scott Seckel

Reporter , ASU Now