Economists have been pleasantly surprised by the U.S.'s recent economic data. The stock market has continued to perform well while a survey by the Department of Labor found that national unemployment had dropped to 8.5 percent at the end of 2011 – its lowest point in more than three years.
Despite these positive indicators for 2012, many Americans are remaining cautious about the actual rate of economic recovery. According to Reuters, consumer spending did not increase during December, despite economists' predictions that it may rise by 0.1 percent as it did in October and November. This data shows that consumers opted to put money into their savings during the holiday season, rather than make extra purchases.
Furthermore, researchers from the Federal Reserve Bank of San Francisco found that there is currently a low demand for domestic labor in the U.S. – leading to the unusually long-term unemployment currently plaguing many Americans, according to Bloomberg.
"Although the unemployment rate peaked at a higher level during the 1981-82 recession, the average duration of unemployment has been running much higher in the recent episode," said Federal Reserve researchers Rob Valletta and Katherine Kuang in a paper released on Monday.