Skip to comments.The Economy Is Fine (Really)
Posted on 01/29/2008 7:52:47 AM PST by Toddsterpatriot
It is hard to imagine any time in history when such rampant pessimism about the economy has existed with so little evidence of serious trouble.
True, retail sales fell 0.4% in December and fourth-quarter real GDP probably grew at only a 1.5% annual rate. It is also true that in the past six months manufacturing production has been flat, new orders for durable goods have fallen at a 0.8% annual rate, and unemployment blipped up to 5%. Soft data for sure, but nowhere near the end of the world.
It is most likely that this recent weakness is a payback for previous strength. Real GDP surged at a 4.9% annual rate in the third quarter, while retail sales jumped 1.1% in November. Snip...
A year ago, most economic data looked much worse than they do today. Industrial production fell 1.1% during the six months ending February 2007, while new orders for durable goods fell 3.9% at an annual rate during the six months ending in November 2006. Real GDP grew just 0.6% in the first quarter of 2007 and retail sales fell in January and again in April. But the economy came back and roared in the middle of the year -- real GDP expanded 4.4% at an annual rate between April and September.
With housing so weak, the recent softness in production and durable goods orders is understandable. But housing is now a small share of GDP (4.5%). And it has fallen so much already that it is highly unlikely to drive the economy into recession all by itself. Exports are 12% of the economy, and are growing at a 13.6% rate. The boom in exports is overwhelming the loss from housing.
(Excerpt) Read more at online.wsj.com ...
Your typical doomer on this website has correctly predicted 12 of the last 3 recessions.
Reading the article might help answer your questions.
Wow, great article, and good to hear.
It’s 1992 all over again. with the success of the surge demos needed a new crisis, so they drag out the big lie that the economy is terrible. It worked for them in ‘92, remember?
Looks very similar to me.
As an aside, when the market was falling, the price of oil was also falling, having gone from $100 to $85 a barrel in a relatively short period of time. The .75 rate cut stopped the market slide, but also IMHO stopped the oil price slide. Other Freepers disagree and think the oil price went up because of China and India increased usage, but I think speculation played a big part. Oil has rebounded to 90. I suspect that if the Feds had let the market shake out naturally, after the oil prices dropped to market, rather than speculative levels, say around $75, the market would have rebounded naturally. Course, what do I know? I'm not even a politician.
Fed Funds is 3.5%. I'm not sure inflation is above that.
and the congress passed a stimulus package in record time?
It tends to work for politicians of all stripes, generally. The primary difference is, when Republicans do it, the MSM allows them to be accused of “talking down the economy.”
They and their willing MSM accomplices.
I think the food-and-energy-included number (the one that’s allegedly kept secret) is running just over 4%.
According to the Dec. 6-9, 2007, poll, 84% of Americans say they are satisfied with the way things are going in their personal life at this time, while 14% are dissatisfied. These results have been fairly stable since Gallup first started tracking Americans’ personal life satisfaction in 1979. The percentage of Americans who say they are satisfied with their personal life has averaged 82% over this period, with a low of 73% in July 1979 and a high of 88% in December 2004. (It is worth noting that in the same Dec. 6-9 survey only 27% of Americans said they were satisfied with the way things are going in the United States at this time, providing a vivid contrast between Americans’ view of things “out there” across the country and their view of their own personal lives.)
Therte can only be one explanation. Just like ‘92, the big lie is being drug out to elect demos. They better hope it dont get away from them though, and turn into true hard times and with a newly elected demo prez. demos have never taken an economy in trouble and made it better.
People can’t pay for their HOMES!
.... and giant flat screen TV, and 4x4s and other toys.
Grandma is eating DOG FOOD!
... course she likes dog food. The good kind.
You must have a higher security clearance than me at the CFR. I don’t remember seeing that. LOL!
Hummmm....pardon my frown but I wonder...
My husband is a car/truck salesman. Has been for going on 10 years, and these last two months -- esp. Jan.-- have been the worst since he's been in the business. We're not just talking about Dodge (which he sells) and we're not just talking about his employer/dealership. All the car dealership here in cen. Ohio have been hosed-- some worse than other but none have escaped.
The parent company that owns the dealership hubby works for also owns two mega dealerships in Mich. Their sales from mid-Dec to mid-Jan. generally run about 200+ cars/trucks in this time period. This time they've sold thirty. Yup, three-oh. Period.
The economy maybe rosy for some but not the car makers/dealership. Even with these drops in interest rates people are simply not buying.
I might be thinking about the (monthly) December number. I don’t carry it around written on a piece of paper, though.
Ah, I love the smell of rationality in the morning.
Too bad its much more fun to fantasize about soup lines and dust bowls. Oh, and pimp gold, of course.
I have never been a huge fan of Bush (as my past posts show), and as an Economics major (and a monetarist at that) I don’t believe the president influences the economy very much under usual circumstances... but the president had to provide over an inherited downturn, the terrorist attacks, corporate scandals, etc., and for six years we had a pretty good run. Nary a word about it in the press; one would think the last seven years were merely the dot-com burst, enron, war in Iraq and now the sub-prime mortgages, all back to back.