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Which way now?

Four years ago, Americans had a bleak view of the U.S. economy. The daily Gallup Poll on the nation’s economic outlook was downbeat—as it had been for considerably more than a year—with a majority of Americans thinking the economy was getting worse.

The downturn that began in December 2007 had turned into the most severe contraction since the Great Depression, and that fact weighed heavily on the populace.

Yet, though it had not been made the official, the recession in fact had ended a half-year earlier; the recovery that continues today had begun.

Today, evidence of a strengthening expansion abounds. The revised figure for third-quarter GDP growth—5 percent—was the sharpest increase in more than a decade. The stock market has been at record highs.

Meanwhile, the U.S. unemployment rate is lower than it has been since summer 2008 and the unbroken streak of private-sector job growth—which began nearly five years ago—is the longest on record.

Even so, half of Gallup respondents think the economy is heading downhill. In a recent RBJ Daily Report Snap Poll, nearly 60 percent of readers said the U.S. economy today is either fair or poor.

We’ll concede not all is well with the U.S. economy. The number of people who are underemployed or who have dropped out of the labor force is too high. For many Americans, wages are stagnant or even have declined, when inflation is factored in.

What’s more, the threat of recession in major economies abroad could drag down growth in this country.

Nevertheless, as we said here four years ago, the odds are very good that things are better than most people believe. And a bit of optimism could make the picture even brighter.

Views of the economy can be self-fulfilling. Conservative, play-it-safe strategies do not trigger robust growth. Only optimism and a willingness to take some risks can do that.

As we enter a new year, some risk-taking—in the broader economy and here in the Rochester region—might be in order.

1/2/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.


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