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On his Economics Unbound blog, BusinessWeek chief economist Mike Mandel writes about America’s evaporating non-petroleum trade deficit. Check it out, and see the numbers….
A couple of optimism indexes were up recently including BusinessWeek/YouGov’s Optimism Index, which tipped 50 for the first time in its five-month history. While it dropped back down to…
Let’s start from the top and move down. Nonfarm payroll fell 247,000 last month – the loss of workers hasn’t been so small since August 2008. Unemployment, now at…
“Home sales have risen for three straight months in the U.S., led by previously hard-hit states like California and Arizona. Home prices have likely bottomed, with the Case-Shiller index posting its first monthly increase in three years. This could unleash a wave of pent-up demand for homes.”
It’s likely we’ll debate the end date of the recession until America’s downturn has come and gone. The official designation – “recession” – is a lagging indicator anyway, declared…
Unemployment tallies continue to grow, but Bangalore reports that an important category among those out of work is declining. Her conclusion: “the pace of layoffs is diminishing.” So, on the one hand, things look worse. On the other, they could be worse still and, hidden in the overall numbers, are signposts of improvements.
Sales of existing homes rose 3.6% in June, to an annual rate of 4.89 million. This is the third consecutive monthly gain. Moreover, sales of single-family existing homes rose 2.4% in the month, to an annual rate of 4.32 million, which is also a third monthly rise.
Nonetheless, this economic slump is showing some clear signs of ending. Bangalore, in his July 20 daily report, notes that the government’s index of leading economic indicators rose in June for at least the third straight month. The LEI climbed 0.7% in June, on top of a 1.3% rise in May and a 1.2% jump in April. And the index’s bottom appears to have occurred last December, when it plunged 3.98%.
“There is more of an expectation that there is a bottoming of economic growth, a slowing of deceleration,” says Christopher E. Vella, global director research for the Chicago-based bank. “They expect a pickup in the third and fourth quarter of this year.”
Berner maintains that a “slow return to thrift” is under way among consumers who had cut their savings rate below zero last year. He argues that this “sea change,” coupled with “aggressive deleveraging,” or the paying down of debt, will mean slower growth in spending in the next few years.
Domestic business activity – based on manufacturing surveys – “is screaming for an imminent rebound in U.S. real non-petroleum imports to the rang of a 6-10% annualized growth.” The bank’s economic models suggest 3-10% annualized growth is possible for the remainder of this year.
What’s surprising, and encouraging about the strength of China’s economic recovery [GDP growth bottomed out in the first quarter at 6.1%] is just how much of China’s growth is being fueled by Chinese consumers.
With typical British understatement the Barclays analysts say the global economy and financial markets have proved to be “much better behaved than they were in the second half of last year.” They point particularly to emerging markets, especially in Asia, where they say the economic cycle has moved ahead of advanced economies.
“The conclusion is that labor market conditions remain weak but the pace of job loss has slowed and initial jobless claims, a leading economic indicator, have peaked,” the Northern Trust economist says. “This combination suggests that the labor market is improving in the desired direction.”
“We are not out of the woods yet, but job demand has definitely stabilized since January,” says Gad Levanon, senior economist at the Conference Board. “Although there is some bounce in the monthly numbers, the number of online advertised vacancies has held steady in the last three months.”
So are there any reasons for luxury retailers to be optimistic? Yes, says Tiffany & Co. CEO Michael Kowalski. I interviewed Kowalski recently for an upcoming magazine piece and he told me that Tiffany is approaching the recession conservatively … but when the financial storm does inevitably clear, he feels luxury consumers’ spending habits won’t be permanently altered.
New signs that China’s economic recovery is gaining speed have led to a flurry of optimistic revisions to GDP growth forecasts in the past week. First the World Bank…
The Conference Board’s Index of Leading Economic Indicators jumped 1.2% in May on top of a revised 1.1% rise the month before, Northern Trust economist Asha G. Bangalore says. “This is the best back-to-back performance of the index since the November-December 2001 period,” she recounts. “The main message from these numbers is that an economic recovery is not too far away.”
As the economy has perked up, nickel prices have risen from below $5 a pound in April to above $7 now. Of course, the industrial mineral has a long way to go to get anywhere close to the nearly $25 a pound it commanded in the spring of 2007. But the gains, reported on by BUSINESS WEEK, are still encouraging to metal-watchers.
Restrained inflation figures, reported by the government, suggest the government policymakers have little to fret about on the price front, Northern Trust economist Asha G. Bangalore says in a June 17 analysis. That helped push up Treasury bond prices and makes it less likely that the Fed will want to hike its main lending rate above the zero to 0.25% range.
“Executives have become notably more optimistic about their companies’ and their countries’ economic prospects since mid-April – but the outlook was so poor then that optimism must be tempered.”
In yet another sign that some key players are acting as if recession is on the run, more offshore manufacturers are shipping goods into the consumer-driven U.S. market, global-trade tracker Panjiva reports. The May trade data marks the third consecutive monthly rise in the number of shippers moving such goods, the first such Trifecta time since the firm began following this metric in July 2007.
“Things are clearly better today than they were three months ago,” the analysts say. “As Jean-Claude Trichet, president of the European Central Bank, said, the economy appears to be ‘around the inflection point.’ The free fall of the last few quarters appears to have moderated and we are now experiencing a slower rate of decline. Nonetheless, there are few signs that we are back on a positive trajectory.”
Expectations that the economy will get worse by the end of this year are clearly diminishing. Only 18% of current workers surveyed believe economic conditions will worsen by the end of 2000, down from 24% in the first quarter of the year. Some 37% expect gains, up from 35% in the opening quarter. Among retirees, 24% expect a worse situation, down from 27% in the earlier period, while 31% expect better, down from 33% earlier.
A sandwich just isn’t a sandwich without the TANGY ZIP of Miracle Whip. If you don’t know that advertising slogan it’s because you weren’t around in 1933, when Kraft launched…
The survey found that just under half – 45% — of the respondents expect conditions to improve over the coming six months, compared with just 17% when they were last quizzed, in February. Some 62% of said they felt optimistic about their company’s growth through the balance of this year, up from 43% in February.
If you doubt that progress has been man’s lot over time, take a look at the work of Hans Rosling. A physician and professor of global health at the Karolinska Institute in Sweden, he uses ingenious software and a keen mastery of statistics to chart societal gains over decades.
Cooper, no Pollyanna, points to signs of improvement in the U.S. housing market, rising consumer confidence and a rally in financial stocks to argue that the economies of the U.S. and Canada, at least, are bottoming.
Eldon Mast beat us with the idea of a blog that accentuates the positive. He calls it The Good News Economist. The slug line: When all you read is…
Some 54% American CFOs recently polled in the Duke University/CFO Magazine Global Business Outlook Survey say they are feeling more optimistic about U.S. prospects than they were last quarter. A cheerier bunch, 63% of those questioned in Asia, are similarly feeling upbeat about their corner of the world.
“The May bounce in labor demand is a very welcome sign,” senior economist Gad Levanon said. “Over the last fours months, there are now about a half-dozen states where the drop in labor demand shows signs of leveling off and another handful of states show some very moderate increases.”
With the U.S. economy in such a deep valley it seems absurd to think that the recession may already have ended. But Paul Dale, the U.S. economist for Capital…
The indicators, summed up nicely by economist Asha G. Bangalore of Northern Trust in her May 26 Daily Global Commentary, show an economy that is opening up but has a ways to go yet. Call it the big thaw. Or, as Bangalore puts it, “in sum, economic conditions are improving.”
The anti-apocalyptic headline above appears on an op-ed piece by two economists who say the recession won’t turn out to be as bad as many fear. They’ve developed a simple…
BusinessWeek’s Joe Weber, Patricia O'Connell, Michelle Conlin, Frederik Balfour, Peter Coy, Greg Spielberg and Roger Crockett examine The Case for Optimism by looking past the financial turmoil and economic unrest gripping the globe to focus on the promising future that lies on the other side of this storm. We’ll chronicle the forward thinkers investing in R&D, launching promising new products, entering new markets, or implementing management and leadership.
See why BusinessWeek Editor-In-Chief Stephen J. Adler is optimistic about the economy amid the sharpest downturn since the Great Depression.