CINCINNATI, Oct. 11, 2016 /PRNewswire/ -- In any
presidential election, the economy is one of the most influential
issues Americans consider when casting their vote. In a new,
five-part video series, Fifth Third Bank (NASDAQ: FITB) analyzes
how government stimulus packages, regulations and trade agreements
– including how immigration and other policies – may shift as the
result of Election 2016 results. Providing commentary are
Joe Gagnon, an economist at the
Peterson Institute, along with Melissa
Register, senior wealth planner at Fifth Third Private Bank,
and Jeff Korzenik, Fifth Third's
Chief Investment Strategist.
Both the stock market and the job market have come a long way
since the financial crisis. But according to Korzenik, a snapshot
of the economy in 2016 still reveals several reasons for
concern.
"Gross domestic product continues growing at a very low rate,
and wage growth has stalled in most sectors," he notes. "Whether
voters select Hillary Clinton, a
Democrat, to likely continue most of President Barack Obama's policies, or choose Republican
Donald Trump to overhaul them, the
only certainty is that the winner will take steps to try to
stimulate the economy."
Encouraging and Managing Growth
Danielle English, government
affairs officer for Fifth Third Bank in Washington, D.C., says the Republicans are
more likely to favor tax cuts to prime the economic pump. On the
other hand, Democrats tend to favor increased government spending
on job-creation strategies, such as programs to build and repair
infrastructure. But she notes, any big new policy or program will
rely on the president being aligned with both houses of
Congress.
For most voters, the election's effect on the economy starts
with the labor market, which has steadily improved since the
financial crisis. The good news is that the unemployment rate,
after peaking at 10 percent in October
2009, has dropped below 5 percent. The bad news is that wage
growth has been sluggish.
To address sagging wages, Clinton has proposed a national
$12 minimum wage, which, if enacted,
could adversely impact industries that rely on unskilled labor.
Another area where federal policy affects wages and employment is
immigration, which has proven to be a highly divisive and emotional
issue in this year's election. On that front, Trump has promised to
curtail immigration from certain regions and to deport undocumented
immigrants, while Clinton has promised reform with a path to
citizenship within her first 100 days in office.
Perhaps surprisingly, international trade has also been a hot
topic this election season, with both Clinton and Trump publicly
opposing the Obama administration's Trans Pacific Partnership (TPP)
agreement. The TPP, and international trade agreements in general,
now affect smaller businesses to a far greater extent than they had
in the past, says Michael Donovan, a
Fifth Third wealth management advisor in the greater Chicago area.
"For entrepreneurs, this is one of the biggest issues. And it
creates uncertainty," he says. That uncertainty has some companies
holding off on signing agreements with overseas suppliers, or
delaying plans to introduce their wares into new foreign markets
until after the election is decided.
Regulation is another area where the presidential election
strikes close to home for many business owners. And the parties
offer starkly contrasting approaches on this issue. For most
regulatory agencies, a Clinton administration is likely to continue
in the same direction as the Obama administration, which sees
regulation as playing an important role in protecting the American
consumer, English says. Trump, on the other hand, has said
repeatedly that the current regulatory environment is a serious
obstacle to the economy, even going so far as to promise a
temporary moratorium on new regulations should he be elected.
The Role of Uncertainty
With the two parties delivering such different visions, the main
impact of the election on the economy is the uncertainty created by
the election itself.
"Uncertainty tends to slow down business investment, which has
already been one of the weakest components of U.S. growth," adds
Korzenik. And while the rhetoric of the two camps may encourage
investors to imagine a number of worst-case scenarios as the
election approaches, it's important to maintain perspective, he
says.
Register puts it this way: "In the moment, it may feel like
we've never seen anything like this with this kind of uncertainty,
but don't let that feeling derail your plans."
The uncertainty created by the election will soon pass, says
Donovan. The clarity that comes when the election is decided, he
says, could potentially lead to increased investment, and an
improved economy.
For more on the potential impacts of Election 2016, Fifth Third
Private Bank has compiled a helpful guide at
http://investing.53.com/FifthThirdPrivateBankElectionOutlook2016.
The five-part video and article series explores the major issues on
the line this November, and how the election may affect retirement,
the economy, investment strategies, taxes, and creating or
preserving wealth for the next generation for years to
come.
About Fifth Third
Fifth Third Bancorp is a diversified financial services company
headquartered in Cincinnati, Ohio.
The Company has $144 billion in
assets and operates 1,191 full-service Banking Centers, including
94 Bank Mart® locations, most open seven days a week, inside
select grocery stores and 2,541 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West
Virginia, Pennsylvania,
Georgia and North Carolina. Fifth Third operates four main
businesses: Commercial Banking, Branch Banking, Consumer Lending,
and Wealth and Asset Management. Fifth Third also has an 18.3%
interest in Vantiv Holding, LLC. Fifth Third is among the largest
money managers in the Midwest and, as of June 30, 2016, had $305
billion in assets under care, of which it managed
$26 billion for individuals,
corporations and not-for-profit organizations. Investor
information and press releases can be
viewed at www.53.com/. Fifth Third's common
stock is traded on the Nasdaq® Global Select Market under the
symbol "FITB." Fifth Third Bank was established in 1858. Member
FDIC, Equal Housing Lender
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SOURCE Fifth Third Bank