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The disconnect is further evidence of the k-shaped recovery, in which some Americans experience major improvements while others still suffer.
For example, a A recent University of Michigan consumer sentiment survey showed that households earning less than $ 75,000 a year were feeling particularly pessimistic about their financial future in February.
Meanwhile, CEO confidence stood at 73 points in the first quarter of the year, marking its highest level since the same period in 2004, according to the Conference Board.
What makes business leaders so optimistic when many workers think otherwise? CEOs believe the salary outlook has improved and the potential for layoffs is lower. Only 12% of CEOs surveyed said they expected to downsize in the next 12 months, compared to 34% in the fourth quarter survey..
In addition, 82% of CEOs expect the economy to improve in the next six months, up from 63%.
“With the vaccine rollout underway in major economies, CEOs have entered 2021 historically optimistic,” said Dana Peterson, chief economist at the Conference Board.
On top of that, the stock market is close to record highs, with the Dow (UNDUE) hit a new all-time high on Wednesday and company valuations are skyrocketing. The strength of the market is due to the hope of more government stimulus measures to bring the economy back to life, as well as the rollout of vaccines across the country.
Goldman Sachs (GS) predicts that U.S. gross domestic product – the broadest measure of economic activity – will increase this year at the fastest pace since 1989. Meanwhile, the Federal Reserve’s interest rates remain close to zero. it’s cheaper for businesses to borrow or refinance their debts.
CEOs can be on to something with their optimism. But for millions of Americas, stock market highs make little difference in their lives.
More than 18 million people received benefits under various government programs in the last week of January, the Labor Ministry reported Thursday.
Economists fear the effects of long-term unemployment on the economy; the longer a worker has been unemployed, the less likely they are to return to work.
Meanwhile, many of those who have returned to work have seen their hours or wages cut, or perhaps both, as the pandemic economy exacerbates inequality in America.
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