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Americans Hold Great Expectations for Pay Raise as Economy Gains

Bloomberg (12/23/14) Nina Glinski

Consumers expect their incomes to rise by 1.7% next year, up 1.1% from the last three months and the highest since 2008, according to the December Thomson Reuters and University of Michigan final consumer sentiment poll. The strongest expectations were among those under the age of 45 at 4.7%, up from 2.9% a year ago.

“As the unemployment rate continues to fall, we’re in the zone right now for wages to begin to pick up,” says Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC. “I wouldn’t be surprised” to see wage growth of up to 3.5% this time next year, he says.