Samuelson: Why 2014 Will Be Good For U.S. Economic Recovery

Robert Samuelson gives four major reasons:

● The job market has strengthened. In the past four months — August through November — non-farm payrolls have increased to an average of 204,000. That’s up from a monthly average of 180,000 for the first seven months of the year. Given how reluctant companies have been to hire, the gains suggest rising confidence. Since employment’s low point in February 2010, the economy has added 7.4 million payroll jobs.

● Household debt is down, wealth is up. The recovery’s weakness has reflected many Americans’ need to rebuild their finances. Having over-borrowed, they repaid debt; facing a collapse in housing and stock prices, they increased savings. All this hurt consumer buying, as income shifted away from shopping.

But the drag is now lessening. Since late 2008, household debt has dropped about $800 billion, reports the Federal Reserve. Along with low interest rates, this has cut household debt payments (principal and interest as a share of disposable income) to the levels of the early 1980s, says economist Scott Anderson of Bank of the West…

● But the drag is now lessening. Since late 2008, household debt has dropped about $800 billion, reports the Federal Reserve. Along with low interest rates, this has cut household debt payments (principal and interest as a share of disposable income) to the levels of the early 1980s, says economist Scott Anderson of Bank of the West.

● Corporations are awash in cash, meaning they can easily finance new investment in buildings, equipment and software. Until now, the cash hoard signified that companies wouldn’t increase industrial capacity because sluggish sales didn’t justify expansion.

By: Alan

Alan Colmes is the publisher of Liberaland.