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Lesko: Reason for Economic Optimism

Jason: Some financial analysts make annual predictions...but Greg Lesko of Lesko Financial says, instead, he's focusing on reasons for an "optimistic outlook."

Greg: That's right Jason. The U.S. economy grew 5% in the third quarter and we can expect it to continue to grow this year. The stock market has been resilient; gas prices have room to fall a bit more, and lower prices at the pump have helped consumer spending.

This, in turn, has led to increased production of goods, which has sparked more hiring. The recent employmnent numbers continue to be very positive.

Jason: How about wages?

Greg: Yes--wages have been lagging behind the rest of the recovery.
But now, with more manufacturing and hiring, there are fewer applicants for every opening. So companies will have to offer more to attract qualified workers, which they will likely do just to keep up with the higher demand from consumers.

Jason: How will interest rates affect us?

Greg: The Federal Reserve has indicated that it will probably begin raising interest rates this year. But every recent statement from the Fed on this has been tempered with words like "patience" -- meaning that any action on rates is likely to come more toward the end of the year and will be telegraphed well in advance to avoid panic in the markets.

Jason: Any other factors this year?

Greg: Some economists have been worried about inflation, but the sharp drop in oil prices have kept inflation in check. As far as global concerns, we'll continue to watch other economies, but the dollar is strong and a consumer-fueled recovery probably won't be dramatically affected by what happens in the rest of the world.