On the economy, wariness trumps optimism
Economically speaking, 2015 has been, well, pretty darn good.
The United States has added 2.3 million jobs since the beginning of the year, and unemployment has dropped to 5 percent. Massachusetts is experiencing an economic surge not seen since the 1990s, with construction cranes lifting towers to new heights and consumers spending more per person than any other state. Jobs are growing here at a 2.2 percent annual rate — more than double the average of the last 25 years.
So why do we feel so bleh?
Confidence among Massachusetts businesses barely budged over the year, while consumer confidence nationally fell in November to its lowest level in more than year, according to surveys. A recent poll by a nonpartisan policy group in Washington found that seven out of 10 Americans still believe the country is in recession — more than six years after it officially ended.
"To anyone paying attention to economic metrics, that seems kind of crazy," said Dan Cox, research director for the Public Religion Research Institute, which asked about the economy in its annual American values survey. "There's a real disconnect between how people think about their own economic situation, how they think the economy is doing, and how the economy is really doing."
Analysts say this glass-half-empty view is the result of several factors. They blame stagnant wages, a shaky global economy, and the 2008 financial crisis, which plunged the nation into the deepest recession in 70 years and left Americans worried and anxious about the next downturn. In addition, they said, the recovery has been uneven, mostly benefiting high-skill workers at the top of the wage scale and coloring perceptions of the economy based on where people live and work.
"There's a bifurcation," said Alan Clayton-Matthews, a Northeastern University economics professor. "There are a lot of households who are doing really well, especially those who are highly educated. And then there are other households who don't have the same level of skills and are working part time."
In Massachusetts, most indicators have pointed to robust growth, led by a thriving technology sector and supported by the state's traditional pillars, higher education and health care. Massachusetts had fewer than 27,000 first-time claims for unemployment last month, the lowest for November since 1987, and a 50 percent drop from the recent peak in 2009, according to Clayton-Matthews's analysis of data from the state Department of Unemployment Assistance.
Unemployment in Massachusetts was 4.7 percent in November, down from 5.4 percent a year ago and 8.8 percent at the recession's peak in 2009. Nationally, unemployment is half the recession peak of 10 percent.
Industries that suffered the worst job losses in the recession are bouncing back. The state's construction industry, for example, lost nearly 35,000 jobs — one in four — from the beginning of the housing bust to the bottom of recession in 2009. Since then, construction has regained nearly all those jobs, adding more than 30,000 in those six years, according to the US Labor Department.
Mark Erlich, executive secretary of the New England Regional Council of Carpenters, said the number of hours worked by the union's members is up 11 percent this year, and the holiday parties at carpenters' locals have been markedly different than in previous years.
"There are a lot more smiles and optimism," he said.
But not everyone has felt the rebound.
Massachusetts has shed more than 7,000 manufacturing jobs since the recession ended in June 2009, according to the Labor Department. The recent global economic slowdown has lowered demand in major foreign markets such as Canada, Europe, and China, and the strong dollar has made things even tougher for manufacturers, increasing the cost of US goods in other countries, said Andre Mayer, senior adviser to Associated Industries of Massachusetts, the state's largest employers group.
AIM's business confidence index hit 60 in March, but has since slipped, declining to 57 in November, the same level as 2014.
"It's a different world," Mayer said. "We've learned to worry about things we didn't worry about before, like the wheels could completely fall off. We are part of a global economy that we weren't aware of before."
Ultimately, many people may have less-than-rosy outlooks because they haven't felt the economic improvement in their pocketbooks, said Aaron Jackson, an economics professor at Bentley University in Waltham.
Wage growth has picked up. Nationally, average weekly earnings during the second quarter of 2015 rose 3 percent from a year earlier, the strongest growth for that period since 2011, according to the Labor Department. In Massachusetts, average earnings in the second quarter grew 5 percent to $1,210 a week, from $1,156.
Those averages, however, mask wide variations that depend on where people live and what they do for work. Average earnings of a Massachusetts tech worker rose more than $150 a week over the year to $2,560, while those of a hotel worker increased just $25 to $650 a week, according to the Labor Department
In Greater Boston, weekly earnings rose an average of 5 percent; in Springfield and Worcester, they increased just 3 percent.
Those increases can seem even smaller with many household expenses rising, said Jackson. Home prices and rent in Greater Boston have skyrocketed; the average two-bedroom apartment goes for $2,600 a month, a 7 percent jump from 18 months ago, according to a Northeastern University study. The median price of a condominium in the Boston area has climbed to more than $400,000, up about 35 percent from 2010.
Food prices in Boston rose 2 percent in the past year, more than double the area's overall inflation rate of just under 1 percent, according to the Labor Department. Nationally, food prices increased 1.3 percent, nearly triple overall inflation of 0.5 percent. Common services, such as getting a haircut or hooking up to cable, have increased 2 percent, Jackson said.
"There's a lot of things going right in the economy," Jackson said. "But those things that people see every day haven't gotten better."