After a long, cold winter, the U.S. economy is showing signs of spring, according to recent surveys of consumer and business expectations.
More Americans are convinced the economy will get better than at any time since 2010, a recent survey from CNBC released Wednesday showed. The results echo similar readings from recent surveys of consumer and business confidence.
CNBC’s poll of 836 Americans across the country found that 36 percent believe the economy will improve over the next year, a nearly 10-point gain from November, and the highest level of optimism since 2010. The survey also found growing optimism in two key economic measures: expected wage gains and home prices.
In a separate report Wednesday, a survey of large-company CEOS conducted by The Business Roundtable, found that corporate managers are also feeling more upbeat about sales, capital spending and hiring for the next six months. In the survey, conducted earlier this month, 128 CEOs boosted their estimates for economic growth this year. They now expect gross domestic product to expand by 2.3 percent in 201012, up from 2.0 percent when the last survey was conducted three months ago.
The Business Roundtable’s survey index, which tracks CEO expectations for the next six months, rose to 96.9 in the latest survey from 77.9 in the fourth quarter of 2011.
Americans said they expect that improved outlook will help boost their paychecks. According to the CNBC survey, Americans expect to see the biggest gains in their paychecks in nearly four years.
They’re also more upbeat about the housing market. Some 22 percent expect their home’s value to increase in the next year, up from 15 percent last quarter and the highest level since December 2010. But 29 percent said their home is worth less than what they paid for it, up from 26 percent a year ago
Those expectations, though, are still lower than they were before the March 2007, just before the Great Recession began, when about 50 percent expected home values to rise. While Americans believe their wages on average will rise by 2.3 percent in the next year, that figure was 7.3 percent five years ago.
The mood is also tempered by the higher cost of gasoline and health care. Those concerns were reflected in a separate survey of consumer confidence Tuesday by The Conference Board, which showed sentiment holding steady after gains in recent months
“Despite the rally in (stock) prices, the increase in gasoline prices, which are now close to $4 a gallon, has started to take a toll on consumer sentiment," according to Paul Ashworth at Capital Economics.
CNBC’s survey found that 28 percent of Americans say high gasoline prices is their biggest worry, ranking it equal with concern over health care costs. The cost of retirement was a distant third at 14 percent.
A third of the public believes that gasoline prices will remain elevated for longer than four years. Expectations that prices of everyday goods will rise are at their highest level in a year.
The improved outlook overall varies considerably depending on household income. About 41 percent of Americans earning more than $100,000 annually expect the economy to improve, but just 32 percent of those earning less than $30,000 share that optimism. That disparity also applies to expectations about wage gains. Those earning $75,000 or more annually expect their paychecks to rise by 4.1 percent in the next year. Those earning less than $75,000 expect an increase of just 1.1 percent.