Consumer confidence on the rise at year’s end
Consumer confidence has been trending upward during 2014, with both the Reuters/University of Michigan survey and the Conference Board survey reflecting a cheerier pre-recession outlook.
“People expect the economy to improve, and their personal finances to improve,” says economist Chris Christopher of IHS Global Insight.
The stock market has recently hit highs, boosting higher-income households, many of which have regained and surpassed their level of wealth before the recession. But middle-income households remain in the red, on average, since the recession. Long-term unemployment is still stubbornly high, wages are barely outpacing inflation, and millions of workers have dropped out of the labor force altogether.
But Bernie Baumohl of the Economic Outlook Group says the overall economic picture is still overwhelmingly favorable: “We’ve got the best job growth that we’ve seen in 14 years. Companies as well as consumers are benefiting from lower gas prices, and from the lowest borrowing costs in history.” Baumohl still cautions that until the global economy gets healthy again and U.S. trading partners rebound, U.S. companies might not feel optimistic enough to go on a big hiring spree or raise wages.
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