While it’s not hard to find people saying an economic dip is around the corner – even I write about it sometimes – the recent past has been tremendous and may set us up well for the future.
Forecasters don’t believe the growth of the last two quarters will last. Many think we’ll slip back to 2-2.5 percent or lower in 2019.
Similarly, there is a sentiment that the record consumer confidence we’ve experienced won’t stick around either, despite hitting an 18-year high of 137.9 in October and remaining strong in November after a slight dip.
In truth, we’re not that far off the all-time consumer confidence high of 144.7, which was reached in 2000. Combine that with the historically low unemployment rate and it’s no wonder consumers and jobseekers alike are feeling confident going into 2019.
Interestingly, sentiment around the stock market increased too, despite the market’s decline. Nearly 45 percent of consumers expected higher share prices in the near-term, while only 19.1 percent felt prices would fall.
Job-wise, employment growth has been exceeding expectations by quite a margin. Consider that in October, 190,000 jobs were expected to be created, while the actual number soared to 250,000. And in even better news, average hourly earnings are up 3.1 percent nationally, marking the first time the wage growth rate has topped 3 percent since 2009.
The main downfall of all this good news is the Federal Reserve will take it as justification for its rate hikes. But, we expected rates to jump anyway.
The question now is, with the economy running at high gear, where can it go from here?