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Originally Posted by Cynthetiq
Did suddenly people get raises? I didn't get one last year. This year I got one, 1.25% which with the increase in property taxes, water, and other goods and services, I'll see none of that increase. But I was "lucky" I got something, which is 1.25% more money going someplace. I don't believe others are able to spend money.
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Nice. I've received 0% over the last 5 years. But this is more about the industry I work in and my own complacency.
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So how could the economy be better if the problems haven't been solved?
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The economy and what influences it is so far-reaching that no one has a single unified "best way" to look at it. Wages are one of many indicators. Suppressed wages, pay cuts, or layoffs are immediately indicative of a recession and it is an indicator that tends to hit closest to home: it's immediate, and you can see it around you. This is why we tend to focus on this and not so much on other things. I was just looking at the numbers, and the Dow is up nearly 30% since Obama took office less than a year ago. How many have been discussing this around the kitchen table...? Exactly.
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What or where is the money coming from? It's not credit, it's not their houses... people didn't magically start making money... so what is it?
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There are people who make money during a recession. There are people who protect their money during one. So when things start to look better (i.e. from the point of view of those with money and knowledge of the economy), some early adopters start spending again. Look around my own neighbourhood and you will see a number of houses being renovated if not replaced. Condos are still springing up like daisies, and 2009/2010 model cars abound. Why? Well, for starters, things are pretty cheap right now. Good deals all round.
Low prices + low interest rates + people with money = borrowing and spending
It's a select portion of the population, but it starts somewhere after most have spent months either curbing their spending or completely "turtled."
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Massive government spending is behind the GDP upswing, consumers aren’t exactly in a spending money since many don't have it, given that unemployment rate this week hit 10.2 percent and raises are close to flat.
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It's one factor. The government is a huge customer to many companies. When they spend, they are hiring people and buying and consuming products. These products and services have to come from somewhere. Then you factor in other GDP spikes: auto purchases and home buying. When someone buys a home, they tend to buy other things along with that purchase. It has ripples through the economy. That is a big part of what's happening now.
As for the rest of your post, I don't tend to split hairs over speculative numbers issued by governments. I tend to look at other data and see what that tells me. People are out of work, may still be laid off, may still not find work, but that doesn't mean the economy isn't headed to recovery. Job creation resulting from that will only happen down the road. It's how these things work. Many companies don't hire in
anticipation of business; they usually hire when they have no other choice. (There are exceptions: retail, for example, but even then not everything is completely predictable.)