Dan Cunningham is a regional investment executive for U.S. Trust, based in Boston. PBN caught up with him at a client event for the bank in Little Compton, where he talked about U.S. Trust’s take on the goings-on in Washington, D.C., the macroeconomic trends and what effect the implementation of the Affordable Care Act will have on the economy, if any.
The private bank arm of Bank of America sees continuing upside to the United States and global economies, with opportunities in the equity markets in the medium term, as well as continuing job growth.
PBN: What effects do you see the federal government shutdown having on the American economy?
CUNNINGHAM: Our expectation is that the shutdown will be short term. Its impact on the market most likely will be minimal, given that it’s a partial shutdown. The impact on government spending should be limited.
PBN: As significant an event as the government shutdown is, what do you think of the potential that Congress will not raise the debt ceiling?
CUNNINGHAM: We are telling clients that the debt ceiling issue is a more significant issue than the continuing resolution because it goes to the full faith and credit of the United States. However, we expect it will be resolved because it’s not in the best interest of either party to have a government default.
PBN: The U.S. economy has been adding private-sector jobs at a steady rate, but there is a lot of talk about the types of jobs that are being added. What kind of jobs do you expect to be created going forward?
CUNNINGHAM: We primarily expect job growth across the nation coming from the energy sector as the U.S. moves toward energy independence, with an emphasis on the new fracking technology and the transmission of energy across the country.
Manufacturing is another area where we expect to see job growth – there is pent-up demand for capital goods that will drive manufacturing, especially given low inventories.
PBN: Have you seen the recovery showing the same strength across the United States?
CUNNINGHAM: The recovery of the housing sector is having the biggest impact in those parts of the nation most adversely impacted by the downturn. Those parts of the country participating in the shale oil and gas upturn should also see significant job growth.
New England has a diverse economic infrastructure – education, medicine and technology – so it continues to be in a good spot, especially in terms of technology growth going forward.
PBN: What do you see as the impact of the implementation of the Affordable Care Act?
CUNNINGHAM: There are a lot of unknowns. No one can be sure today what the impact will be. And while there is much discussion of the impact, and we may have seen some negative impact to hiring related to what the definition of a full-time employee is, this discussion is more about politics than hard data.
daniel p. cunningham,
affordable care act,