News Journal: 2015 is a year for cautious optimism

Did you see the headlines—“American Economy Booming”—in all the papers last week? No? I didn’t either, but when you look at the numbers and recent polls, those three words pretty much sum up what’s been happening as we begin a new year. The November jobs report was spectacular—320,000 new jobs were created. It was the 57th month in a row of positive private sector job creation. Even before December’s numbers are counted, 2014 stands as the best year for job growth since 1999. The Conference Board reported last week that the Consumer Confidence Index was at its highest level since February of 2008. That confidence was probably boosted by what the November report said about average hourly wages, which grew a strong .4 percent, bringing growth for the year up to 2.1 percent. The dramatic drop in gas prices also helped. CNN reported last week that its poll “showed for the first time in seven years, a majority of Americans—51 percent—have a positive view of the economy, a sharp increase from the 38 percent who felt that way in October. The jump was present in every demographic group—men, women, whites, non-whites, urban, rural— and was largest among Americans who earn less than $50,000 annually.” Gross Domestic Product was up 5 percent in the third quarter of 2014, the fastest our economy has grown in eleven years. GDP is by far the best measure of economic activity, and growth like this is a solid cause for genuine optimism. The Dow Jones average hit a new record high just before Christmas, and closed out the year 7.5 percent higher than its 2013 close, 103 percent higher than its 2008 close. It was the seventh year in a row of a higher stock market. So why were there no headlines about a booming economy? Politico’s Michael Grunwald had one answer. “The press has a problem reporting good news,” he wrote last week. “Two Americans died of Ebola and cable TV flipped out; now we’re Ebola-free and no one seems to care. The same thing happened with the flood of migrant children across the Mexican border, which was a horrific crisis until it suddenly wasn’t. Nobody’s going to win a Pulitzer Prize for recognizing that we’re smoking less, driving less, wasting less electricity and committing less crime. Police are killing fewer civilians, and fewer police are getting killed, but understandably, after the tragedies in Ferguson and Brooklyn, nobody’s thinking about that these days. The media keep us in a perpetual state of panic about spectacular threats to our safety—Ebola, sharks, terrorism—but we’re much likelier to die in a car accident. Although, it ought to be said, much less likely than we used to be; highway fatalities are down 25 percent in a decade.” True about the media and good news, I think, but there is another reason you didn’t see the booming economy headlines. The fact is, when asked how they and their families are doing, too many Americans are still answering “not so good.” Too many have dropped out of the workforce after months or years of searching for jobs they couldn’t find. Too many are working at lower-paying jobs than they had before the Great Recession of 2008-2009. Too many are still struggling to survive on wages that have been stagnant for years. All the indicators I’ve mentioned are reason to hope that by the end of 2015 many of these people will feel better about how they are doing. Especially If the growth in higher hourly wages continues to accelerate, I believe a lot more Americans will have a positive view of their future prospects. There’s no question America’s economy looks even better when compared to the rest of the world. Europe and Japan seem destined for a recession in the coming year. China’s incredible economic growth is slowing. Russia is about to fall into a serious recession. Of course there are always unknowns, especially internationally, and more than a few black clouds. The biggest one I see is the gridlock in Washington, which I fear will be even more brutal and divisive than ever. Could our political divisions undermine an impressive economic recovery? I’m betting against that happening. So I begin 2015 more optimistic about our economic future than I have been in years. I hope you share some of that optimism and have a happy and prosperous new year.

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