SAN FRANCISCO (7/2/14)--Perception is everything when it comes to gauging the health of the economy, and in Credit Union National Association interim Chief Economist Mike Schenk's perspective, while there's still a long way to go, the economy is currently trending up.
The job environment is one reason why "there remains a disconnect between overall consumer confidence and the day-to-day struggles consumers still face," Credit Union National Association Interim Chief Economist Mike Schenk notes during a Tuesday session on the economy at America's Credit Union Conference. (CUNA Photo)
Schenk walked a gallery of credit union professionals through his take on the state of the economy Tuesday at a special America's Credit Union Conference session called "Impact of the Economy: Credit Unions, Current Issues and What Lies Ahead."
While not all aspects of the economy have fully rebounded since the economic downturn in 2008, Schenk said there's enough evidence to believe the nation's financial health is finally improving.
"We think the economy has gotten better, and we think that it's going to get better yet," Schenk said.
Experts forecast a 3% expansion in the economy for the second quarter, pent-up demand continues to swell, labor markets have been healing and manufacturing has improved since the beginning of the downturn, among other bright spots, Schenk said.
But there seems to be a disconnect between what's actually happening in the economy, and how people perceive its health.
When Schenk asked those in the audience who felt the economy was improving to raise their hands, every single attendee did so.
Polls, however, say that the majority of U.S. citizens don't believe the economy is rebounding, Schenk explained, citing a study that found only 38% of people feel the economy is getting better, while 58% believe it's getting worse.
"That's a pretty powerful observation, I think the economy is getting better, you think the economy is getting better, but our members don't think it's getting better," Schenk said.
Part of the reason for this, is due to the tepid rate at which jobs have come back since the start of the recession. Further, there are concerns over the quality of the jobs that have been produced of late.
"If you're looking for reasons why people may not be feeling that good, these are folks that are employed but they're not making a lot of money," Schenk said. "Jobs that don't take a lot of education but pay well and have good benefits, those jobs are going away, and that's a big deal."
The trend signals a growing belief that salaries are polarizing in the United States to high-paying jobs and low-paying jobs with middle-class individuals being squeezed out of the equation.
If income growth and quality jobs aren't produced, Schenk said, any further improvements to the economy will be anchored down.