Confidence is Americans’ biggest asset for future economic growth, James Paulsen, chief investment strategist with Wells Capital Management, told an audience last week at the American Society of Pension Professionals & Actuaries’ 401(k) Summit.
"That fear mongering campaign [in 2008] really worked. It caused a free fall in the economy," he said, adding that “for some reason, our leaders thought it was okay to run into the economy and yell ‘Depression!’” He compared it to someone running into a crowded theater and yelling ‘fire!’ causing widespread panic.
The events of 2008 caused what he called ‘Armageddon hypochondria.’ "We’ve been looking every day for the next economic blowup.” Still, he believes, "I think we’re back in recovery. If inflation stays in control, we’ve got a great shot at a prolonged economic recovery."
Fellow speaker David Joy, chief market strategist with Columbia Management, predicted the U.S. economy will grow about 3% this year. "Coming out of a recession of the one we endured, the rate of growth is substandard," he said. "But 3% is good for the investing environment, particularly equities."
The labor market is improving, he said but "corporations are very slow to pull the trigger is this regard. They’d rather spend their resources on capital investment. It’s cheaper than hiring back labor."
Overall, said Joy, "we think it’s gong to be a good year, not a great year, for the economy. It’s going to be an average year in terms of historical returns. That might not sound so exciting but in an environment with inflationary pressures, it’s not so bad."
Register or login for access to this item and much more
All Employee Benefit News becomes archived within a week of it being published
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access