Disconnection is further evidence of the K-shaped recovery, in which some Americans are experiencing major improvements while others are still suffering.
For example, a Recent research on consumer sentiment at the University of Michigan showed that families earning less than $ 75,000 a year felt especially pessimistic about their financial futures in February.
Meanwhile, the CEO’s 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 while many workers think otherwise? CEOs think the salary outlook has improved and the potential for layoffs is less. Only 12% of surveyed CEOs said they expect a reduction in the workforce in the next 12 months, down from a strong 34% in the fourth quarter survey.
In addition, 82% of CEOs expect the economy to improve over the next six months, a jump of 63%.
“With vaccine implementation underway in major economies, CEOs entered 2021 historically optimistic,” said Dana Peterson, chief economist at the Conference Board.
In addition, the stock market is close to historical records, with the Dow (INDU) reaching a new record high on Wednesday and company valuations skyrocketing. The strength of the market is due to the hope of more governmental stimulus to bring the economy back to life, as well as the launch of vaccines across the country.
Goldman Sachs (GS) predicts that the US gross domestic product – the broadest measure of economic activity – will grow this year, at the fastest pace since 1989. Meanwhile, the Federal Reserve’s interest rates remain close to zero. it is cheaper for companies to borrow or refinance their debts.
CEOs can be right with their optimism. But for millions of the Americas, the highs of the stock market make little difference in their lives.
More than 18 million people received benefits from various government programs in the last week of January, the Department of Labor reported on Thursday.
Economists fear the effects of long-term unemployment on the economy; the longer workers are unemployed, the less likely they are to return to work.
Meanwhile, many of those returning to work have seen their hours or wages cut, or perhaps both, as the pandemic economy exacerbates inequalities in the United States.
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