2015 Is The “Year of Normalization”22 Jun 2015, by Market Update in
A few days ago, Marci Rossell—the former chief economist for CNBC—delivered an upbeat, long-term assessment of the U.S. economy to the annual meeting ofMichael Saunders & Company. Rossell is calling 2015 the “Year of Normalization” on three important fronts:
- Labor markets have stabilized and wages are beginning to rise as competition to hire and retain good workers heats up. Because jobs are key to home ownership, the good news for the housing market is that the nation’s unemployment rate has fallen to 5.5%—a level considered full-employment by leading economists. (Locally, Sarasota and Manatee Counties’ rates are 5.0% and 5.1% respectively according to the U.S. Bureau of Labor Statistics)
- Gas prices have been on a breathtaking downward trajectory now that the U.S. controls vast supplies of its own domestically-produced oil. Savings at the pump should boost the discretionary income of every U.S. household by an average of $1,500 per year.
- U.S. monetary policy will begin to take carefully-calculated steps toward normalcy later this year. With interest rates expected to be dialed-up very slowly—as has been forecast for some time—markets should take the increase in stride. In fact, rising interest rates when also applied to their deposits may actually encourage Americans to continue their newfound penchant for saving even as they enjoy more spending power.
Credit to MSCBlog