Tags: Bartash | economy | growth | wages

MarketWatch's Bartash: Expect 3 Percent Growth for First Time Since 2005, Pickup in Wages

By    |   Sunday, 04 January 2015 12:04 PM

The economy will probably grow 3 percent in 2015 for the first time in 10 years, and that should be accompanied by significant gains in wages, which have stagnated since the Great Recession began in 2007, says Jeffry Bartash of MarketWatch.

GDP growth averaged 2.5 percent for the first three quarters of this year.

"The U.S. is set to add nearly 3 million jobs in 2014," Bartash writes. "The burst in job creation, expected to continue in 2015, is sure to fuel consumer spending. So, too, will a plunge in gasoline prices that's given households extra cash to spare on other goods and services."

Consumer spending accounts for approximately 70 percent of GDP.

Hourly wages have averaged only a 2 percent annual gain for the last four years, barely topping inflation, which is now running at a 1.4 percent annual rate.

That has created "one of the main shackles on the economy," Bartash writes. "Yet that's finally about to change."

He cites Gus Faucher, senior economist at PNC Financial Services, who says, "Everywhere I go business owners are seeing an increase in demand. Businesses will have to raise wages to attract or maintain workers."

In addition, Bartash states, "The sharp decline in unemployment will start to seem real."

Meanwhile, Nobel laureate economist Paul Krugman gives President Obama credit for at least some of the economy's health.

"The story you hear all the time portrays economic policy as an unmitigated disaster, with President Obama's alleged hostility to business holding back investment and job creation," he writes in The New York Times.

"It comes as something of a shock when you look at the actual record and discover that growth and job creation have been substantially faster during the Obama recovery than they were during the Bush recovery last decade."

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The economy will probably grow 3 percent in 2015 for the first time in 10 years, and that should be accompanied by significant gains in wages, which have stagnated since the Great Recession began in 2007, says Jeffry Bartash of MarketWatch.
Bartash, economy, growth, wages
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2015-04-04
Sunday, 04 January 2015 12:04 PM
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