October 28, 2009 – Economic Report

Filed Under Economy · Tagged:  

A summary of economic information compiled for your enlightenment by our Principal Broker, Tom Brock, MBA

 

·House Prices Stalling – ISI’s house price has stopped improving y/y and they expect it to tick down for a period of time. This is reflective of the expiration of the tax credit. However, the Case Shiller did tick up in August and September. This can be considered a shot in the arm for consumer balance sheets and may slow foreclosures if consumers feel they are not “under water.”

·Inventories across the country have been drawn down a record amount. This is all a part of cost cutting. Profits have increased and combined with lower corporate costs we have a powerful engine for economic growth over the next 4 quarters.

·Very Complex Economic Outlook – Normally from a recession this deep, you will see massive growth in the first 4 quarters of recovery. This is unlikely to happen this time around. However, 2% growth in 2H of this year and 4% overall next year do seem likely. This is enough to create employment, at least to a limited degree. Housing and auto sales have not shown the sustainable recovery that many people expected; however, chain store sales are much stronger than expected and real consumer spending in Q3 rose at a strong rate. Corporate profits are better than expected. Unemployment claims are declining and employment is poised to grow soon. Capital spending is stronger than expected. Foreign economies are clearly improving. This is a positive sign for the US especially considering the weak dollar and its effect on exports.

 

Again, an unprecedented global recovery is likely to drag a sluggish US economy into a sustainable recovery. Taiwan and HK imports are up considerably. This indicates a booming Chinese economy that is driving consumer activity. China’s industrial output may rise 16% in Q4. On the flip side, this will drive O&G consumption which could fuel inflation in the US or stagflation if our GDP does not continue to grow…

 

 

 

October 28, 2009 by beebedou : No Comments

Comments

Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!