Gains in hiring and wages are boosting Americans’ moods.
The world’s largest economy will strengthen through 2012 as employment gains give Americans the means to withstand rising fuel costs, according to economists surveyed by Bloomberg News.
More jobs, increasing share prices, improving confidence and stability in housing will bolster the expansion. At the same time, unemployment will be slow to retreat, averaging 7.3 percent in 2014, showing why Federal Reserve policy makers recently said interest rates will remain low for at least the next two years.
“Some of the conditions for faster growth are falling into place,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. By the end of the year, “we’ll still be a long way from what would make the Fed more comfortable. They will still be missing their full employment objective.” IHS Global Insight was the second most-accurate forecaster of consumer spending over the two years through February, according to Bloomberg calculations.
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Source: Shobhana Chandra and Alex Tanzi | Bloomberg