While high unemployment and stagnant wages remain a drain on the economy, signs of improvement in other areas could help give us a much-needed boost if Congress can get its act together and agree on a budget.
The Associated Press reported Monday the housing market is seeing a positive rebound. Home prices rose 7.4 percent in the 12 months that ended last November, according to the AP, which noted that was the largest increase in six years.
Additionally, the AP reported, housing starts are expected to hit 970,000 this year. People also are heading back to auto dealers. According to the AP, sales last year hit 15.5 million. Banks are also looking healthier, with the AP reporting that commercial, mortgage and auto loans are all on the uptick and bank profits reached the highest level in six years during the third quarter of last year.
These major drivers have the potential to give our economy a better boost than the 2 percent growth that has been predicted, but a lot of it hinges on what Congress does and if it acts in the same irresponsible manner that it did last year.
Other factors that could hold down the recovery are continuing high unemployment and stagnant wages. Add in the hit that working families took when the Social Security tax break expired at the end of 2012, and families are still reluctant to spend or take on additional debt. Since consumer spending is the major driver of the economy - accounting for about 70 percent - consumer confidence is an important piece of the puzzle.
The increase in home construction, more activity on business sites and additional auto sales all translate into more jobs, so the potential exists for the economy to improve at a better pace than expected. That could all be derailed, however, if Congress gets in to long, heated battles that put a priority on political brinkmanship over doing what is best for the country.
It has been a long hard road out of the worst economic hit since the Great Depression, but this year the signs all point to a stronger recovery, as long as Washington politics doesn't stand in the way.
