Economic trends should give senior living operators reason for cautious optimism, according to a leading economist. That’s because the economy’s main driver – consumer spending – appears to be rebounding.
“The economy is finally on firmer footing,” said Stuart Hoffman, chief economist at PNC Financial Services.
But two possible culprits – oil prices and Washington lawmakers – could undermine recent economic gains, he cautioned. Hoffman spoke Tuesday morning at a seniors housing regional symposium sponsored by the National Investment Center for the Seniors Housing & Care Industry. The event was held in Boca Raton, FL.
Consumer confidence has been bolstered by an uptick in hiring and a small rally on Wall Street. He noted that continued optimism is essential for a full recovery. That’s because consumer spending accounts for about 70% of the nation’s economic activity.
But with pump prices inching toward $5 a gallon in some markets, buyers might be less inclined to spend money in other areas – including senior care, he said. Hoffman said that policy shifts in Washington to trim payments to providers could also have a negative effect.
Hoffman, a self-described Republican, said a more balanced approach to fiscal policy that slightly raises taxes while trimming spending in a disciplined way would be far less jarring. He also predicted that interest rates and housing prices would likely rise in the next few years.