A. Lee Graham firstname.lastname@example.org Viewed through the lens of diminished expectations, the U.S. economy is growing, homebuyers are snapping up properties, and private companies are hiring again.
In fact, a leading economist says 2014 is shaping up to be a promising environment.
“I’m pretty optimistic about next year,” said Mark Dotzour, chief economist with the Texas A&M University Real Estate Center.
Speaking Dec. 4 at a Society of Commercial Realtors breakfast at Colonial Country Club in Fort Worth, Dotzour described the economy as growing at a 2 percent pace, 2 to 3 percentage points slower than he said it should be growing.
Still, as measured from the economy’s sliding scale, Dotzour considers that good news.
“We’re going to get 2 percent again and maybe a little more this coming year,” said Dotzour, calling the pace “tepid.”
“I’ve decided tepid is the new excellent,” said Dotzour, blaming the diminished standard, at least in part, on a presidential administration he believes is not nurturing job growth. In fact, the economist likened Washington leadership to a governor device restraining speed on golf carts.
“The government is part of the drag on the golf cart,” Dotzour said. Far from dragging down the economy are consumers, whose spending constitutes about 65 percent of the gross domestic product.
“We are world class at buying stuff. We can out-buy anybody on the planet,” said Dotzour, pointing to recently released Department of Commerce numbers showing personal spending as accelerating.
Housing is picking up a considerable chunk of the nation’s $75 trillion household net worth after diminished home values stalled sales in recent years, Dotzour said. Furthermore, household debt is dropping.
According to the Board of Governors of the Federal Reserve, household debt service payments as a percentage of disposable personal income has fallen to less than 10 percent compared to 13.5 percent in recent years.
“We are below the bottom of the normal range of income that goes to debt,” Dotzour said.
Hiring looks promising next year, with 32 percent of CEOs surveyed saying they plan to hire in 2014, according to the Business Roundtable, a group of conservative CEOs promoting pro-business public policy.
And manufacturing will pick up steam, Dotzour said.
“As we grow into energy independence in the production of natural gas and oil, the lower price of natural gas will make it even easier for these manufacturers to be globally competitive,” Dotzour said.
Despite public perception to the contrary, almost 4 million job openings are waiting to be filled, according to recently Bureau of Labor Statistics information. Among those 3.9 million total job openings nationwide are those in construction, manufacturing, retail, professional business services, health care and government.
“The bottom line is American people do not tolerate deferred gratification. They have net worth, and have money to spend, and job growth is increasing at a tepid rate. That’s why I’m bullish for 2014,” Dotzour said.