(Photo Credit: David Paul Morris/Bloomberg/Getty Images)
Motorists are about to get a price break from the soaring cost of gas. New claims for unemployment benefits are close to a 7-year-low. Businesses plan to hire more workers.
Call me a Pollyanna, but I think the US economy is ready for stronger growth. And after years of flat-ling, living standards may be set to improve
One thing I love about reporting the economy is that you can never be sure of anything. It’s easy to change your mind when confronted with fresh evidence.
So, if you’re among the majority of gloomy Americans who still think the economy is in a funk, here goes….
The US Labor Department said this morning that first-time jobless claims dropped again last week. For several months, the weekly average for new claims has been sharply lower than last year’s level – an indication of fewer pink slips from employers.
A new mid-year employment survey says today there is “forward momentum in the job market.” CareerBuilder, a job placement firm, asked more than 2,100 HR and hiring managers about their hiring plans for the next six months.
“Employers expect to add more jobs in the back half of the year,” spokeswoman Jennifer Grasz of CareerBuilder tells me. “The results of this year’s survey were indicative of a more confident employer population compared to 2013.”
“Fed, Confident in Economy, Details End of Bond-Buying Program,” proclaims a headline in The New York Times.
Because of recent improvements, the new Fed statement says the central bank plans to stop adding to its bond holdings by October.
“The labor market appears to be firing on all cylinders and is finally self-sustaining,” wrote two PNC Financial Services economists, Stuart Hoffman and Gus Faucher, in their recent note.
The price of oil has dropped for 9 straight days as global supplies continue to flow despite the growing problems in various parts of the Middle East – the world’s most important oil-producing region.
The truth is supplies are plentiful. US refineries are producing more gasoline, which may lead to sharply lower prices for motorists in the weeks ahead.
Although the insurgency in Iraq is a humanitarian disaster, it hasn’t halted oil exports. The fighting now seems unlikely to spread to Iraq’s major oil fields.
Tensions between Israel and Hamas have escalated in the past week, but they aren’t threatening any major oil production.
Oil exports from Libya may rise after an agreement between the government and local militias cleared the way for export terminals to open. And US production continues to soar.
Cheaper oil is a short-term plus for the airlines. Revenue at American, United and Southwest – three of the largest US carriers – is up this summer, compared to last year.
Until now the biggest drag on US growth has been flat living standards. Since the stock market bounced back from the 2008 financial crisis, there’s been a yawning gap between the Main Street and Wall Street economies.
Consumer spending is has been limited to only modest gains. Long-term unemployment is still way above average.
But if the CareerBuilder forecast is correct, and the job market shows much stronger signs of life, more of us will have reason to agree with Pharrell Williams and be Happy.
(Parts of this post from my MorningMoneyMemo blog at abcnews.go.com/business)