Economists: US 'Okay,' But Wait 'Til Next Year

(For more on the NYU conference, click here.)

NEW YORK CITY-Among developed nations, “the US has the best chance of growing itself out of its fiscal problems” in spite of the challenges it faces, said economist Jason DeSena Trennert at Monday's 35th annual New York University International Hospitality Conference. However, Trennert, managing partner, chairman and CEO of Strategas Research Partners, and fellow panelist Steven Blitz identified a number of steps the US could take to get out of its own way.

Trennert would like to see the federal government stimulate private capital formation. “With a kind word from the government and cutting of some regulations, you could see the economy soar,” Trennert said.

Even so, Trennert noted that when he and Blitz, chief economist at ITG Investment Research, took the stage at 2012's edition of the NYU hotels conference, much of the conversation focused on the policy overhang being exerted on the markets. This year, he said, the markets have largely absorbed the policy shocks, as evinced by the Dow Jones Industrial Average's recent rallies.

We're seeing a “major shift” in government policy, which is now focused on industrial sectors such as energy, Blitz said. For the past three decades, it had been focused on growing the financial sector.

In the short term, both Blitz and Trennert used the word “okay” to describe the overall state of the domestic economy, although globally headwinds remain. As to when it will start to become more than merely passable, the two economists were more sanguine about the prospects for 2014, even if the second half of this year could see some acceleration.

Potentially weighing on the recovery for the balance of this year, said Blitz, is the first year of military deceleration since the US exited Vietnam in 1973. He and Trennert both cautioned that the economy at present is prone to uneven results, with Blitz likening the US to a baseball team with a .500 batting average, which from that basis sees good numbers and bad. “You get streaks” both positive and negative, Blitz said.

The numbers in theory could be better, said Trennert. From a balance sheet perspective, “corporations are probably in the best shape they've ever been.” However, cap-ex spending remains cautious.

“The missing element seems to be some sort of confidence,” said Trennert. “The raw materials for a strong economy are there.” CNBC's Steve Liesman moderated the discussion.

Tying in his own experiences with the hospitality industry's reputation for philanthropy, lunchtime keynote speaker Bob Woodruff recounted his global travels as an ABC News correspondent and his struggle to bounce back from the serious injuries he sustained in 2006 when his tank caravan came under fire by Iraqi insurgents. He said the injuries would have been fatal were it not for the efforts of everyone from his translator, who put his fingers on the wounded Woodruff's neck to stanch the bleeding, to helicopter pilots who ignored an order not to land at a base that was being strafed.

Woodruff, who jokingly claimed to know nothing about the hospitality sector, invited conference attendees to participate in a major fundraiser scheduled for November by the Bob Woodruff Foundation, a nonprofit he launched to help injured veterans and their families and caregivers.