Although it seems from the media that Obamacare is the big issue the US economy is facing, it seems that economists disagree. The fact that the November Jobs Report was so positive sets a positive tone for the economy in 2014. Ylan Q. Mui and Zachary A. Goldfarb pointed out that: “massive layoffs among state and local governments have largely ended, with many places now adding jobs.”
According to ‘The Economist,’ we should also “expect the annual Edelman Trust Barometer in January to show that Americans’ trust in business continues to recover from post-financial crisis lows, while trust in government remains far lower.”
Chief Economist at Moody’s Analytics, Mark Zandi says:
“I think the economy is gaining traction. We’ve got some more hurdles, the budget battles in Washington need to be nailed down early next year but I’m growing more confident that this economy is going to enjoy much stronger growth next year.” He sees American GDP increasing by 3% in 2014 and approximately 4% the following year.
CFA at Square One Asset Management, David Schawel gives his take on the situation vis-à-vis recent reports. The recent reports showed an increase in consumer credit “materially above consensus expectations. Unlike the recent past where the increase was primarily driven by student loans, a large amount of the pick up was in the revolving credit segment. Again, this is something we haven’t seen in some time now. There’s been an overall reluctance to take on debt in the consumer segment.”
New River Investments Financial Advisor Guillermo Roditi Dominguez has concluded that over the summer there have been three significant developments: first that the workforce has stopped expanding. Second, that the amount of public sector employees stopped decreasing and may actually be witnessing growth signs. And third that the” real average hourly earnings growth of non-supervisory employees” has developed to “a level coincident with the last expansion.”
Dominguez further explains:
“The interesting part about the position we find ourselves in is that, because of the very low effective corporate income tax rate (~16.35% last year), and very low corporate investment rate, the marginal dollar earned by the corporate sector has very little impact on the economy, it just sits as retained earnings.”
So it seems like the general perception of experts in the industry is that the US economy is set to grow during 2014.