This was the year the US economy was supposed to shake off the shackles from the Global Financial Crisis and start to fly.
The second half of 2014 saw a raft of strong economic news – house prices rose, more people were employed and economic growth was at levels not seen before 2007.
This year though has been a bit more subdued for the world’s largest economy – but its not all bad news.
The job market is the strongest it has been in 15 years and more people are in work now, however wage growth through the hard times has been sluggish and yet to catch up. Recent data released by the US Treasury showed while consumer confidence is high, that has yet to translate in to consumer spending rising. Not even cheaper gasoline at the pumps has resulted in increased spending.
The good news is, for long term growth anyway, that Americans seem to have learned their lessons from the GFS and are saving more.
“Americans learned some lessons from the last downturn and they are saving more money,” Frank Friedman, chief financial officer of the global business-consultant firm Deloitte LLP told the website MarketWatch “Even if wages increase, people will probably save more and that’s a good thing.”
Chief global economist Bob Baur of Principal Global Advisors agrees.
“Consumer behavior has changed. Households have been really chastened by the huge debt problems during the financial crisis,” Baur told MarketWatch. “They saw neighbors or friends or even themselves lose their house. They are more afraid of debt.”
While the growth this year may not be as explosive as predicted last year, analysts agree there will still be growth, just at a more sustainable rate.
“I think we are going to continue to see a bunch of fits and starts,” said JJ Kinahan, chief strategist at TD Ameritrade. “The boulder is not just going to keep rolling down hill.”