The second quarterly Council of Economic Advisors meeting of 2019 was filled with two “T’s” at the top of the gathering. Talk of tariffs and transportation drove the conversation, when it came to a wide array of market segments.
Karen Gilmore, of the Federal Reserve Bank of Atlanta, began with saying that businesses had previously said they could absorb the first 10% of tariffs, but if another round would come, they wouldn’t be able to absorb it. In that case, the costs would make their way to the consumer. She maintained the question that with a tight labor market, how is that going to affect wages and inflation? She ended her portion by saying the thing to watch is inflation.
Overall, increasing tariffs do not seem to be giving the Council much worry, but there’s no doubt the U.S. trading tariffs with China is on the radar. Most of the worry among the C-level business leaders in the room centered upon affordable workforce housing and transportation.
From retail and hospitality to construction, business leaders say the ability for employees to get to work on time, because they’re traveling from the suburbs to the urban core, has become alarmingly difficult. In turn, employees are seeking jobs closer to home especially if it comes with just a minor increase in pay.
Further, many Council members lamented that the cost of pulling permits and regulatory acts are impacting business, especially in the fields of construction/manufacturing and banking respectively.
The price of healthcare, and more specifically prescription drugs, was also a topic of concern at the meeting. Business leaders say healthcare plans are putting increasing stress on certain companies. Caitlin Stella, from Joe DiMaggio Children’s Hospital, was in the room and chimed in on some of that concern. She did mention that Florida Governor Ron DeSantis has pushed to bring in medication from Canada, as well as calling for an increase in telemedicine.
As is customary, business leaders in attendance voted on a variety of questions, This month's results are based upon the votes of 18 executives.