Noted economist Peter Ricchiuti of Tulane University is upbeat about the economy and the U.S. stock market, claiming that we’re only in the “middle innings” of our recovery. At the CUNA Mutual/CPI Retirement Academy in St. Louis, where over 200 advisors and 34 DCIO partners gathered, Ricchuiti questioned the press and pundits who are putting a negative spin on the economy.
The key to full rcovery is reducing government debt through budget and entitlement cuts and higher taxes, as well as increased revenue from a rebounding economy, Ricchiuti said. The market likes low interest rates, which as the biggest debtor, the government has an interest in preserving.
Cash and profits at corporations are extremely high and household debt is down, with $7 trillion sitting in money market accounts, he noted. The job market for 2013 grads is the best since the recession. And for the first time is a while, the world economy is not being led by the U.S., which is good for exports.
None of the traditional indicators for a double dip inflation are currently present, Ricchiuti said, such as high but falling housing starts; high but falling weekly working hours; and an inverted yield curve.
What concerns Ricchiuti? Low GDP growth, which needs to be at 3%; a U.S. immigration policy that lets talented foreigners in to get their education and then kicks them out; and restrictions on free trade.
It can be hard to tell when Ricchuiti is being facetious — which is often — but he seemed serious in his message at the CUNA/CPI’s Retirement Academy that this recovery is no joke. What's your take on his comments? Use the box below.
