Current economic conditions
Source: http://www.econbrowser.com/archives/2009/11/current_economi_3.htmlPosted on Wednesday, November 4th, 2009 | In Economics, Investing Lessons
The U.S. recovery is underway. But so far it doesn’t look as strong as we had been hoping.
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U.S. light vehicle sales last month were up slightly from September and about the same as October 2008. Given how dismal those comparison months were, that’s not saying much. Last month’s sales were 3.5% below the average level of April through June, which, because sales usually decline a bit more than that in the fall, counts as a modest seasonally-adjusted improvement. We seem to be past the bottom for autos, but climbing back painfully slowly at this point.
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The same might be said of new home sales, which despite a slight setback in the most recently reported month (September), have definitely been gaining from the lows reached in March. But there’s still a long way to go before new home sales would reach the average levels seen in the 1980s.
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Existing home sales, which don’t contribute directly to GDP but which do help absorb some of the overhang of distressed properties for sale, have been growing more solidly, and NAR’s pending home sales index is up 12.5% over the last two months.
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Other new indicators have also been mixed. The Manufacturing ISM PMI, an index summarizing the responses of managers answering their survey, registered its third consecutive month above 50, indicating more respondents said that conditions were improving than said things were getting worse.
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On the other hand, real personal consumption expenditures and real disposable personal income both dipped back down in September.
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I remain convinced that the key indicator for a normal recovery will be a resumption of growth in U.S. employment. Unfortunately, ADP is estimating that the U.S. lost 203,000 private-sector jobs in October on a seasonally adjusted basis.
Bill McBride says we are a long way from normal. And I say, don’t bet against Bill McBride.
Last 5 posts by James Hamilton
- Receiver operating characteristics curve - November 18th, 2009
- Commodity inflation - November 15th, 2009
- Will rising oil prices derail the recovery? - November 10th, 2009
- Consequences of the Lehman failure - November 7th, 2009
- A welcome GDP report - October 29th, 2009
 About James Hamilton (http://www.econbrowser.com)
James Hamilton received his Ph.D. in Economics from the University of California at Berkeley in 1983. He has been a professor at the University of California, San Diego since 1990 and served as Chair of the Economics Department from 1999 to 2002. He is the author of Time Series Analysis, the leading text on forecasting and statistical analysis of dynamic economic relationships. He has done extensive research on business cycles, monetary policy, and oil shocks, and has been a research adviser and visiting scholar with the Federal Reserve System for 20 years. |
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