CLARKONOMICS: After three years of negativity, desperation and depression, it’s nice to see more signs that the economy is on the mend for real.
First, let’s start with the psychological. A new report from the Conference Board shows that consumer confidence has hit 54.1, a 5-month high. That number stood at 54.3 in June, but dipped to 49.9 as recently as October.
Second, here’s a true material fact: Private sector job growth is now the highest it’s been since 2007. It’s been almost exactly three years to the month since private sector employment was as high as it is now. That’s a significant increase over what we’ve seen in recent times when employers were mostly shedding jobs.
Finally, consumers are in better shape with personal debt. Barron’s reports that credit card debt is down 16% over the last two years. Meanwhile, car loan debt is down 12% during the same period.
In short, Clark believes we have set the table for meaningful recovery in the economy.
A word about the controversial decision not to extend unemployment benefits. There will be a number of people who will exhaust their benefits. How that will play out economically over the next few months is very hard to tell. People who receive unemployment compensation tend to spend roughly 100% of that compensation. So suddenly all that money won’t be getting pumped into the economy, and that’s where the guesswork about what happens next begins.