I’ve had a brush with a touch of pneumonia, hence blogging has taken a back seat to healing. Good drugs have helped turn the corner so I’ll try and get back to some semblance of regular posting.
Anyway, there were a couple of fairly positive economic reports over the past few days that would seem to indicate that the recovery continues albeit slowly.
The BEA reported its second estimate to third quarter GDP which put annualized growth at 2.5%. It was a small increase from the 2.3% initial estimate but, hey, when you’re growing this slowly any upward revision looks good. Actually, when you consider that the real estate sector of the economy — a big slice — is flat on its back, the fact that the country is producing growth at this level is actually somewhat impressive. You can nitpick the numbers but you can’t deny that, however fitfully, the economy is picking up a bit of steam.
And then yesterday we get some pretty welcome news from the DOL. Initial unemployment claims were down 34,000 to 407,000 and the 4-week moving average was down 7,500 to 436,000. Still big numbers but were at a level not seem since August 2008 as this chart from Calculated Risk shows.
There’s a long way to go on the employment front but it’s probably safe to say that we’ve at least embarked on a path of improvement.
The point might well be that $13 trillion economies don’t simply implode, nor do they continue shrinking. Sheer momentum kicks off growth. Maybe not what we would like or need but growth nevertheless.
It seems to me that any move to a higher level of growth is going to depend a great deal on two things. One, how soon we can get the real estate market back to some level of growth. And, two, what comes out of Washington in terms of taxation and regulation. I don’t expect substantive progress on either soon and, therefore, don’t think that any sort of boom is in our immediate future.