A Healthier Economic Recovery for 2014
Posted at 7:40 a.m. on Dec. 30, 2013
Robert Samuelson makes the case for a “healthier recovery” in 2014, claiming that “many economic ‘fundamentals’ are improving simultaneously.”
- The job market has strengthened. Since employment’s low point in February 2010, the economy has added 7.4 million payroll jobs.
- Household debt is down, wealth is up. Household debt payments have dropped to the levels of the early 1980s … Meanwhile, higher stock and home prices boosted household net worth to $77 trillion in September, well above 2007’s $68 trillion.
- The housing recovery isn’t finished. Scarce supply … has kept inventories of unsold homes at low levels of about five months of sales instead of the more normal six to seven months.
- Corporations are awash in cash, meaning they can easily finance new investment in buildings, equipment and software.
But Samuelson cautions: “A better recovery presumes that consumers and companies respond to good news as in the past. But they may not.”