Since the recovery of the US economy following the “Great Recession” of 2007, unemployment has steadily declined but wages have remained virtually unchanged, an historic anomaly. However, wages for one segment of the population have seen a gradual up-tick: minimum wage workers.
American consumers are getting more confident while home prices continue to rise, as historical tailwinds turn to headwinds that are helping the country sustain its economic recovery.
After a downturn in February, the Consumer Confidence Index rose to 101.3, an increase of 2.5 percentage points from February. The Conference Board noted that the index, which measures consumers’ general feeling about future economic conditions, saw a sharp uptick while economic expectations for the future rose.
The US dollar is mostly lower as liquidity thins, and soft economic data kept the bulls penned. The soft ADP estimate and weaker than expected manufacturing ISM offset the heightened rhetoric about Greece’s 460 mln euro payment due to the IMF next week.
Sometimes in politics, it is not the text that counts, but rather the context. Policies that are benign or even ignored by the electorate in one political constellation can suddenly fuel intense debate when there is a shift in the alignment of external forces. Think of Chancellor Merkel’s sudden decision to abandon nuclear power in Germany after the Fukushima reactor meltdown caused by the March 2011 earthquake in Japan. Nothing had changed about the safety of the German reactors themselves, but everything had changed about the broader context.
South Asia is home to a growing youth population and widely considered to benefit from the “demographic dividend” in the coming decades. The United Nations Population Fund’s State of World Population 2014 report The Power of 1.8 Billion: Adolescents, Youth and the Transformation of the Future therefore call for increased investment in youths and adolescents.
Schooling versus learning
High levels of immigration are often justified by the positive effect on economic growth, but there are powerful environmental and economic arguments for limiting the numbers.
A recent report by the Pew Charitable Trust has found that the middle class has definitely gotten smaller since 2000. But, with the economy on the rebound, should it not be growing again?
Americans saw their incomes rise in February, helping spending to rise slightly as goods and services become slightly more affordable.
Personal incomes rose 0.4% in February, the same gain that incomes saw in January. A new report by the Bureau of Economic Analysis showed a total of $61.8 billion in higher personal incomes for the month of January and a $58.6 billion increase in February.
Tax Burdens and Discretionary Consumption
The US dollar remains bid as liquidity begins to slip away from the foreign exchange market, not to return until April 7. The inability of the euro and especially sterling to trade higher despite favorable economic news is noteworthy. At the same time, the Nikkei’s fall (0.9%) after a similar slide in the S&P 500 yesterday (and a lower opening projected today) has failed to keep the dollar below JPY120.
March may begin as a lion and end as lamb, but the US dollar is finishing the month as it began, with underlying strength. The main exception is the Japanese yen, against which the dollar is flat, perhaps a reflection of the weaker Nikkei (-1%), and softer US shares.
