From the desks of the Hotel News Now editorial staff:
- More details about Republican tax plan trickle out
- Consumer confidence jumped to near 17-year high in October
- Optimism abounds at first day of Lodging Conference
- Chinese government further pulls back on foreign investment
- Signs indicate a December interest-rate increase
More details about Republican tax plan trickle out: Despite the unveiling of the Republican tax reform plan being delayed a day to Thursday, new details have come out about the plan, The Washington Post reports. Among the bigger details shared is that the plan will keep the tax rate for the top bracket of earners at 39.6%, rather than lowering it to 35%, to help “assuage concerns that it will mainly benefit the rich,” according to The Post article.
The plan also calls for lowering the corporate tax rate from 35% to 20%, a move popular with the business community (hoteliers included), but that’s not a sure thing if the reduction proves to be too costly, the newspaper reports.
Consumer confidence jumped to near 17-year high in October: The Conference Board’s latest survey showed consumer confidence reached an almost 17-year high in October, increasing 5.3 points to 125.9, the highest since December 2000, Reuters reports. According to the survey, households “in the $125,000 and over income group” felt good about the labor market and business conditions, which could in turn lead to more consumer spending.
“An optimistic consumer emboldened by a solid economy and an increasingly competitive labor market is likely to continue to spend, reinforcing a virtuous cycle that should be supportive of further growth,” Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan, told Reuters.
Optimism abounds at first day of Lodging Conference: Hoteliers speaking during the first day of The Lodging Conference in Phoenix shared their overall optimism for the U.S. hotel industry, reports HNN’s editorial staff attending the conference.
Bernard Baumohl, chief global economist for The Economic Outlook Group, told attendees the U.S. economy will continue to grow.
“I see this (economic growth of 2.5% to 3%) continuing whether or not we have a tax cut,” he said.
Chinese government further pulls back on foreign investment: Outbound Chinese capital into foreign properties and development sites hit a record of $36.8 billion in 2016, The Wall Street Journal reports, but the dollar volume for the first three quarters of 2017 has only reached $19.7 billion. Policymakers in China’s government are continuing to tighten restrictions on overseas investments over fears of companies looking for safe havens for their capital.
“One thing that’s concerned the regulators, these rich entrepreneurs were leveraged to the hilt, using investors’ money, using (People’s Republic of China) banks’ money, and leaving all the risk to the PRC investors and PRC banks,” Howard Zhang, a Beijing-based partner at law firm Davis Polk & Wardwell told the newspaper. “There’s a strong sentiment among the regulators, as well as among the general rank-and-file who resent how rich these people have become.”
Signs indicate a December interest-rate increase: The Federal Reserve doesn’t appear likely to raise interest rates at its meeting today, but there are signs officials will make a move in December, The Wall Street Journal reports. In recent remarks, Fed Chairwoman Janet Yellen said that “ongoing strength of the economy will warrant gradual increases.”
The country’s economy continues to show strong growth, with gross domestic product rising by 3% in the third quarter, the newspaper reports. The combination of robust consumer spending, a strong labor market and overseas growth is “likely to give Fed officials comfort as they debate when to next raise rates.”
Compiled by Bryan Wroten.