Yay! Some GOOD news about the economy!

[oldiebutgoodie]

Several stories in the news seem to offer hope:

Stocks Climb As Economic Data Again Top Forecasts...
NEW YORK — Investors pounced on fresh signs Wednesday that the economy's slide might be starting to slow. Stocks rose more than 1 percent, including the Dow Jones industrial average, which jumped 130 points.

The government reported that February brought increases in demand for big-ticket manufactured goods and higher sales of new homes. Both readings came in better than expected.


Durable Goods Orders Rise....
WASHINGTON — Orders to U.S. factories for big-ticket manufactured goods and new homes sales both rose unexpectedly in February, but economists said the gains were unlikely to last as the recession persists.

The Commerce Department said Wednesday that orders for durable goods _ manufactured products expected to last at least three years _ increased 3.4 percent last month, much better than the 2 percent fall economists expected. It was the first advance after a record six straight declines and the strongest one-month gain in 14 months.


February New Home Sales Rise Unexpectedly...
WASHINGTON — New home sales rebounded unexpectedly last month, but were still the second-worst on record and remained well below last year's levels, according to data released Wednesday.

The glut of unsold homes and competition from deeply discounted foreclosed properties puts even more downward pressure on prices and on builders' profits.

Investors, however, cheered at the new home sales numbers and bid up shares in the major builders by 7 percent or more in morning trading.

To lure buyers, President Barack Obama's stimulus package included an $8,000 first-time homebuyer tax credit. Plus, the Obama administration has unveiled a $75 billion plan to curb foreclosures, which are aggravating problems in the housing market and the overall economy.


Mortgage Applications Jump
NEW YORK (Reuters) – U.S. mortgage applications jumped last week as record low interest rates spurred a surge in demand for home refinancing loans, data from an industry group showed on Wednesday.

Interest rates on mortgages fell after the Federal Reserve last week said it would buy Treasury securities for the first time in more than four decades as well as more than double its planned purchases of mortgage-related securities, according to Orawin Velz, associate vice president of economic forecasting at the MBA in Washington.

"The drop offered a sizable refinance incentive for most homeowners, sparking a pick-up in refinance activity," she said in a statement.

[oldiebutgoodie]

...and how does the public view our economy and our President's efforts to jump-start it? Here are just a few questions and answers from PollingReport.com (more questions and answers at the link):

[nonesuche]

Well post Obama's speech last night along with this report, the DOW takes a licking...

http://articles.moneycentral.msn.com/Investing/Dispatch/market-dispatches-032509.aspx?icid=dispatch_090325
By Charley Blaine and Elizabeth Strott
That was some rally -- while it lasted.

Stocks shot higher this morning, with the Dow Jones industrials jumping more 200 points in the first hour of trading, thanks to two better-than-expected economic reports and President Barack Obama's pep talk to the nation last night.

Durable goods orders rose an unexpected 3.4% in February, the biggest gain in more than a year, the Commerce Department reported this morning. New-home sales rose a surprising 4.7% in February, much better than economists expected.

But waves of selling started to hit the market around 10:45 a.m. ET, and the rally stalled quickly.

The catalyst appears to have been a report in The Wall Street Journal that IBM (IBM, news, msgs) was expected to chop a large number of U.S.-based jobs in its global-services business and move them to India.

The cuts "show that even companies that are successfully navigating the global recession are continuing to slash costs--some of them by taking advantage of cheaper Asian labor," The Journal noted.

IBM had been up as much as 1.6% but was down 1.3% to $97.25 at 1:55 p.m. That swing took 20 points out of the Dow by itself. Other technology shares weakened as well, and financial stocks also started to slip.

By 2:10 p.m. ET, the Dow was down 17 points, or 0.2%, to 7,643. The Nasdaq Composite Index was down 10 points, 0.7%, to 1,507, and the Standard & Poor's 500 Index was off 4 points, 0.5%, to 802.

Also weighing on markets:

Yields on Treasury securities moved higher after an auction of 5-year notes produced higher-than-expected yields. The fear among traders was that record sales of U.S. debt was overwhelming demand, Bloomberg News said. The yield on the 5-year note rose to 1.812% this afternoon from 1.693% on Tuesday.
 
Crude oil was down $1.17 to $52.81 a barrel this afternoon. The Energy Information Administration this morning said crude inventories rose by 3.3 million barrels last week.

Janet Yellen, president of the Federal Reserve Bank of San Francisco, said that disinflation and even deflation will represent greater risks than inflation for some time.

[WhiskeyGirl]

Unemployment rises in 71 of 72 Wisconsin counties

The hardest-hit cities are Beloit at 16.9% unemployment and Racine at 15.6%. They're followed by Janesville at 14.6%, West Bend at 12.3% and Sheboygan at 12.2%.

http://www.freep.com/article/20090325/BUSINESS07/90325103/1020/BUSINESS07/Unemployment+rises+in+71+of+72+Wisconsin+counties

The good hasn't reached some areas of Wisconsin.   

[WhiskeyGirl]

Michigan jobless rate reaches 12%

http://www.freep.com/article/20090325/BUSINESS06/90325095/0/BUSINESS07

[A's Fever]

Oldie, thank you for posting this good news.  I have been wanting to start such a thread but have not had time to be here very often lately, and when I am I usually go to the Haleigh thread. 

In addition to the info you posted, there have been other signs of stabilization and/or improvement in the economy.  Retail sales have begun to stabilize and improve slightly, indicating that the consumer is showing some resiliency.  The Baltic Shipping Index has shown improvement, suggesting that trade is improving.  Copper prices are rising and that is an important sign as copper is important to the building trades.  And finally, the price of oil is increasing, which, though hard on our pocketbooks, implies that the market perceives an increase in demand, usually seen as global productivity.  All very positive signs.

The stock market did indeed tank today after an early rally, but the Dow and S&P rallied off the lows to post a gain of about 1%.  This was a very exciting and encouraging day, because when the S&P declined it broke through the support level of 800-802 ish and looked to be headed below the 200 day moving average.  The strong reversal however sent levels back over both the 200 day moving average and the support level of 802, finally closing at 813.  This is very positive action and suggests that the current rally may not be over yet.

Unemployment is a lagging indicator and historically a recovery will be well underway before unemployment numbers improve.  So I am afraid we will be faced with huge numbers through early next year, though I hope it isn't so.

I know we are still in for some very rough times, but I feel there is hope on the horizon.  For the first time in a long time!

[nonesuche]

I am concerned that Obama devotees aren't looking at the scope of this nor the propensity for all of this mammoth rapid spending driving inflation sooner than many want to admit could occur. The majority of the growth in home lending is for refinancing, it remains very difficult for new home buyers to secure loans at favorable rates. Unemployment may not matter to some of you, but it does to many other Americans. Unemployment is over 10% in my state and I know it is in your state too A's, perhaps you didn't have time to read that article in detail but that's at least 5,000 jobs in one month for one company OFFSHORE. Those aren't jobs that will come back A's, those are jobs lost.

Small business is still struggling as are many large retailers, many voters aren't going to loosen up their purse-strings to begin to make consumer purchases unless they feel they are less at risk of losing their jobs.

I can't accept surface assessments that just refuse to examine all facets of the economy or to examine the true details. We all have certain indicators that are more meaningful to our livelihood than others such as industrial or trade indexes, but that isn't necessarily true domestic growth that will benefit the pain for our citizens currently - but yes for those vested in financial services, indeed it's what you care about.

[A's Fever]

We have been bombarded with nothing but bad and worse economic news for months now, so regardless of political affiliation, it seems to me to be a good thing to notice and bring forward good news when it occurs.  When the economy is as bad as it is, even news of stabilization, or less deterioration, is something to take note of.  Things may get worse before they get better, however the seeds of recovery are being sown now. 

I don't know who is not taking the unemployment rate seriously, but it is unrealistic to expect that this will turn soon.  The best we can hope for for the time being is that acceleration in job losses slows.  But positive economic news is certainly a harbinger of distant recovery and that will bring jobs next year.

Of course some jobs are gone forever, but new ones will be created.  All economies change over time and ours is no different.  We began as an agrarian society, became industrial, and now we are high tech and service oriented. As companies move out of the recessionary period the need for sales professionals may grow at the expense of back office personnel for example, health care and energy may grow while industrial jobs may never come back.  Who knows where it will go but it is guaranteed not to be the same.

One other thing I forgot to mention in my post above, listing positive things, is the number of current mergers and acquisitions.  Genentech/Roche, Cisco/Pure Digital, IBM/SunMicro come to mind, there are others but it is late and I can't think.  These activities show first of all that the capital markets are beginning to work again.  But more importantly, it shows that businesses are moving forward and planning for the future.  That means they are still going to be around to compete, and ultimately it means jobs.

Inflation will be a concern but it is not at this time.  It will come with growth. I've noticed that both Geithner and Bernake are being questioned about inflation and their "exit strategy" by congress and it will be very interesting to see how policy is shaped to address this issue when it arises, or before.  We can only hope that these guys will be on top of it, but right now they need to be focused on getting the economy going again. 

[nonesuche]

TIME has a new piece overnight and it speaks to my great concern here, are some just so hopeful to prove Obama that any good news will do? My other concern which I have seen played out over the last two years at a terrifying level, is that either many don't want to examine the details or they refuse to?

I can't agree that M&A creates jobs A's, in my personal experience it deletes jobs and I stand firm in that belief. The job losses during this recession in the larger corporate landscape will not result in new jobs to replace them in that sector either.

Small business is our best bet to grow jobs and it's the leaders and owners in small businesses that will be impacted most by some of Obama's proposed tax changes. In fact this recession is proving those are also the same business leaders willing to cut their own compensation to fuel retention of their employees, not the large corporation leaders who refuse to cut their mammoth bonus structures or if asked to such as with AIG, resign in protest with op-ed pieces in major newspapers?

I agree with this writer at TIME, we are far and away from a vivid sign toward a real recovery.

Continued heavy job loss will kick this limping dog with the possibility of worsening the recession and many economists are convinced it could have a significant impact.


http://www.time.com/time/business/article/0,8599,1887684,00.html?cnn=yes

Is the Economy Starting to Recover? Or Just Less Bad?
By Justin Fox Wednesday, Mar. 25, 2009

Could it be that things are beginning to get better for the U.S. economy?
Nope, no real chance of that. But a spate of somewhat better-than-expected economic numbers this week and last has forecasters declaring that the pace of decline seems to have slowed. Such a slowing has to happen before things start to improve. Which could mean that we're seeing the beginning of the beginning of the end of this nasty recession.

Then again, we might not be — and premature optimists have been punished several times already during this downturn. So the people who make a living calling the twists and turns of the economy have become almost comically cautious about declaring an inflection point. Some examples:

Wednesday's stronger-than-expected data on durable-goods orders (up 3.4% in February, but from a January number that had been revised downward) was a "slim silver lining on the horizon," UniCredit Research economist Harm Bandholz wrote in a note to clients. But, he was quick to point out, "investment and exports continue to plummet." (Read "How to Know When the Economy Is Turning Up.")

"The unexpected increase in orders in February marks a moderation relative to the incredibly weak data in January," wrote Michelle Meyer of Barclays Capital in response to the same durable-goods data. "However, we do not interpret today's report as a signal of the end of the downturn in manufacturing."

"We are prepared to hazard the view that the post-Lehman meltdown is now over and the market is stabilizing" is how Ian Shepherdson of High-Frequency Economics greeted Wednesday's reported rise in new home sales. "That's not the same as a recovery, but it is better than continued declines in sales."

"While these developments provide some support for our expectation that housing will stabilize in coming months," declared Kent Michaels of Goldman Sachs on Tuesday after running through other positive real estate data, "they fall well short of what would normally signal recovery in the sector."

There are several reasons for all this caution among economists. One is that the numbers aren't all that positive, and a few good days could easily give way to a disappointing run. Also, there's a lot of noise in the data, and seeming turning points are sometimes just the product of flawed measurement and random chance.

Another issue is that while there are signs that housing and consumer spending in the U.S. are no longer in the free fall of a few months ago, other parts of the economy are still in sharp decline. To quote Shepherdson again: "The epicenter of the recession has shifted from the consumer to the corporate sector." And it's possible that corporate cutbacks could lead to a relapse among consumers. "The main downside risk probably lies in sharper-than-expected multiplier effects via the dramatic deterioration in the labor market," warned Goldman Sachs economist Jan Hatzius on Monday after predicting that consumer spending would rise for the rest of the year. "Both the weekly and monthly labor market indicators still show an accelerating employment contraction."

In other words, nobody really knows if we've hit a turning point yet. But it is at least ever so slightly encouraging that they're starting to talk about one.

[WhiskeyGirl]

I think inflation is with us already.  Social Security checks got their largest increase ever for 2009, something like 5.8%.  Scared a lot of people I know, they thought it was a mistake.  Social Security is a COLA.  Some believe it doesn't increase enough, others believe it increases to much.

Where are the new jobs?  I don't see any being created that add value to the economy.

Who's putting together all those goods in the 'orders' I keep hearing about?  Who manufactures refrigerators?  Americans?  I don't think so.

Who's buying all the houses? 

[nonesuche]

WG I agree, I do think inflation is upon us, food and gas have already begun significant climbs. I live in an area in which home sales were not hit as hard as many other areas in the last two years but..........they have been at a standstill since our unemployment hit around 7% and with it now over 10% and projected to possibly hit 14%+ by year-end I don't see home sales rebounding anytime soon.

Any hiring ongoing currently is within small companies and I know masses of good professionals with strong credentials that cannot even find positions to apply for.

[A's Fever]

TIME has a new piece overnight and it speaks to my great concern here, are some just so hopeful to prove Obama that any good news will do? My other concern which I have seen played out over the last two years at a terrifying level, is that either many don't want to examine the details or they refuse to?

I can't agree that M&A creates jobs A's, in my personal experience it deletes jobs and I stand firm in that belief. The job losses during this recession in the larger corporate landscape will not result in new jobs to replace them in that sector either.

Small business is our best bet to grow jobs and it's the leaders and owners in small businesses that will be impacted most by some of Obama's proposed tax changes. In fact this recession is proving those are also the same business leaders willing to cut their own compensation to fuel retention of their employees, not the large corporation leaders who refuse to cut their mammoth bonus structures or if asked to such as with AIG, resign in protest with op-ed pieces in major newspapers?

I agree with this writer at TIME, we are far and away from a vivid sign toward a real recovery.

Continued heavy job loss will kick this limping dog with the possibility of worsening the recession and many economists are convinced it could have a significant impact.


http://www.time.com/time/business/article/0,8599,1887684,00.html?cnn=yes

Is the Economy Starting to Recover? Or Just Less Bad?
By Justin Fox Wednesday, Mar. 25, 2009

Could it be that things are beginning to get better for the U.S. economy?
Nope, no real chance of that. But a spate of somewhat better-than-expected economic numbers this week and last has forecasters declaring that the pace of decline seems to have slowed. Such a slowing has to happen before things start to improve. Which could mean that we're seeing the beginning of the beginning of the end of this nasty recession.

Then again, we might not be — and premature optimists have been punished several times already during this downturn. So the people who make a living calling the twists and turns of the economy have become almost comically cautious about declaring an inflection point. Some examples:

Wednesday's stronger-than-expected data on durable-goods orders (up 3.4% in February, but from a January number that had been revised downward) was a "slim silver lining on the horizon," UniCredit Research economist Harm Bandholz wrote in a note to clients. But, he was quick to point out, "investment and exports continue to plummet." (Read "How to Know When the Economy Is Turning Up.")

"The unexpected increase in orders in February marks a moderation relative to the incredibly weak data in January," wrote Michelle Meyer of Barclays Capital in response to the same durable-goods data. "However, we do not interpret today's report as a signal of the end of the downturn in manufacturing."

"We are prepared to hazard the view that the post-Lehman meltdown is now over and the market is stabilizing" is how Ian Shepherdson of High-Frequency Economics greeted Wednesday's reported rise in new home sales. "That's not the same as a recovery, but it is better than continued declines in sales."

"While these developments provide some support for our expectation that housing will stabilize in coming months," declared Kent Michaels of Goldman Sachs on Tuesday after running through other positive real estate data, "they fall well short of what would normally signal recovery in the sector."

There are several reasons for all this caution among economists. One is that the numbers aren't all that positive, and a few good days could easily give way to a disappointing run. Also, there's a lot of noise in the data, and seeming turning points are sometimes just the product of flawed measurement and random chance.

Another issue is that while there are signs that housing and consumer spending in the U.S. are no longer in the free fall of a few months ago, other parts of the economy are still in sharp decline. To quote Shepherdson again: "The epicenter of the recession has shifted from the consumer to the corporate sector." And it's possible that corporate cutbacks could lead to a relapse among consumers. "The main downside risk probably lies in sharper-than-expected multiplier effects via the dramatic deterioration in the labor market," warned Goldman Sachs economist Jan Hatzius on Monday after predicting that consumer spending would rise for the rest of the year. "Both the weekly and monthly labor market indicators still show an accelerating employment contraction."

In other words, nobody really knows if we've hit a turning point yet. But it is at least ever so slightly encouraging that they're starting to talk about one.

I don't think that looking for small signs of improvement in the econonomy equals being in denial about the current state of affairs.  The bad news is current, looking for the positives focuses on the future.  The two are not mutually exclusive.  It depends what you want to focus on and has nothing to do with political affiliation. I'm looking at the future and planning accordingly because it's all I can do.

I personally find it hard to believe that inflation is present in any significant way.  Food prices in supermarkets have dropped significantly.  Costs for durable goods such as cars and computers have declined, as has clothing, gas, travel and other consumer items.

No one has posted that there is any job growth currently.  On the contrary, as I mentioned above, the economy will begin to recover before the jobless rate declines, and it (unemployment rate) is likely to get worse before it gets better. 



JMHO 

[nonesuche]

I have seen only the opposite reported regarding food prices, perhaps they are less on the west coast but on the east coast, they have risen significantly. Toward that end some of the largest restaurant chains such as Outback have reduced portion sizes stating publicly it is due to rising food costs? If you have a link to a report I haven't seen then please share?

My weekly grocery bill has risen around 11% since December, particularly for meat, fruits and vegetables. I don't purchase pre-packaged foods with the exception of coffee, bread, oil, butter/oleo, pasta/grains & tomato paste/cheese. I am tracking all of my expenses currently very closely due to my concerns regarding my own job security in this uncertainty. I've also employed an 'austerity' budget hopeful what I save now can help my family to survive this downturn.

Last evening both Wolf Blitzer and Lou Dobbs were all over the issue of some of our largest US corporations offshoring jobs while also holding out their hands for economic stimulus monies. I was hopeful some of you were watching......

Again, if unemployment continues to rise at the current pace then that will negate what other trickles of improvement we are seeing.

Obama stated publicly he isn't concerned about the offshoring of jobs for those are "low skilled" people. Categorically NOT true ! Worry about your neighbor folks, don't allow this to happen to their job for yours may be next !

[A's Fever]

Wish I could employ an austerity budget but we are into stimulating these days.  Daughter's Junior Prom is coming up so we have our own little stimulus plan going on.  Man this thing is expensive!   

[nonesuche]

A's let me know what size she wears, I have all of daughter's prom dresses and I"m sure one would work 

Yes proms are expensive, son's actually was more expensive than daughter's with paying for dinner, flowers, limo, and tux. He's my more expensive child anyway!

Unemployment leaped up in my state again today, we're #4 in the nation now !! 

[GreatOwl]

Unemployment is very cruel right now.  We are holding out own in the middle of the pack, but that is deceptive.  We have lost many of the higher paying jobs and people have taken what they can just to make ends meet or freeze to death.  Many are now working two jobs at minimum wage with no benefits.  They don't technically count on the unemployment, yet are falling behind day by day.  Every night seems to bring a new list of layoffs in our state.

Proms, college expense etc. etc. was expensive for us back in the day.   I had three daughters attending high school at the same time.  My son was inexpensive because he and a group of his friends always preferred to attend the dances "stag" which was a new concept in those days.  A group of guys and a group of girls seemed to enjoy just meeting up at restaurants, dances and parties and paying their own way.  This was in a private school so it was a small class, but a very close one.

[LouiseVargas]

I have to agree with Nonesuche about food prices. Food prices in Los Angeles have skyrocketed. A boneless rib steak at my local Gelson's cost $18.99 per lb. If I go down to Pavilions at Vine and Melrose, the rib steak is much cheaper, but still expensive. Fresh vegetables and fruits are through the roof at both stores. I have to go to the Armenian market to get better prices. The milk I buy there sours within a day or two. I can't buy milk there anymore. The fruits and veggies are less expensive but still expensive. Most of my diet these days consists of slices of a crusty baguette bread and slices of a big link of processed polish sausage with exotic mustard. I have definite eating preferences. I don't eat the cheap food such as pasta, beans and rice. No macaroni and cheese. No hamburger helper. I can't find anything I like to eat at a low price.

Starving, Louise

[nonesuche]

oh Louise now I'm worried about you !! I don't know who the predominate grocery chains are in CA but I shop here at Food Lion who has much lower prices on staples, a grocer like that will have milk at a lower price that doesn't sour in less than a week too, I found chicken tenders there for $1.79/lb last weekend and stocked up putting several packs in the freezer. I also shop at Sam's Club and split packs of meat with my son and daughter. Do you have a neighbor who has a Sam's membership? They run around $35/yr here and the meat prices alone are worth it. I would have never made it through feeding son during his junior high and high school years without it. If you go early on Monday mornings (they open at 7am here) then they mark down meat as well. I also freeze meat in meal sized portions.

As for fruit I do buy blueberries on special and have to buy raspberries for customers for our baked goods, but Trader Joe's has better prices on those and on avocado's too? I do find that fruits and veggies from Trader's spoil faster though. Bananas are still cheap as are bags of oranges and apples. I like fruit salad but even if you don't, do you like regular salad? Sometimes I put apple and orange thin slices into my green salad. I'm not big on beans either but did try a sausage and lentil soup this winter that was really good, I can send you that recipe to try for it's inexpensive to make too. I also buy a pack of around 20 roma tomatoes at Sam's which is less than $5 and make roasted tomato soup with those, another easy recipe I can post for you.

Do you like eggs? I do omelettes often and mix it up what I put into them. I know it's hard to get motivated to do a lot of cooking for just one but that's where soups have been a godsend for me.

I hate you feel you can't eat healthy due to these prices, I really do. You have to take care of you and your health.

[nonesuche]

Unemployment is very cruel right now.  We are holding out own in the middle of the pack, but that is deceptive.  We have lost many of the higher paying jobs and people have taken what they can just to make ends meet or freeze to death.  Many are now working two jobs at minimum wage with no benefits.  They don't technically count on the unemployment, yet are falling behind day by day.  Every night seems to bring a new list of layoffs in our state.

Proms, college expense etc. etc. was expensive for us back in the day.   I had three daughters attending high school at the same time.  My son was inexpensive because he and a group of his friends always preferred to attend the dances "stag" which was a new concept in those days.  A group of guys and a group of girls seemed to enjoy just meeting up at restaurants, dances and parties and paying their own way.  This was in a private school so it was a small class, but a very close one.

GO I quite agree with you, the job losses are not so easy to trace and you are exactly right, it's some very senior jobs and also more senior employees. The more experience you have, the more you cost - it's a simple equation. Layoff's of more senior employees is more bang for the buck for costs like pensions and healthcare matter as well, unlike when you could count on a company you have given the bulk of your career to, wanting to honor your pension.

[WhiskeyGirl]

That expensive meat goes somewhere when no one buys it.  Today I got a call from some who got a standing rib road from a food pantry.  It started out at $30 something dollars, didn't sell, was frozen and given away.  They were clueless about what it was and how to cook it.  It was a little large for the crock pot. 

They've gotten quite a few expensive 'exotic' things, not the hamburger helper, beans, rice, and meat chubs they are used to.  I think the expensive stuff isn't selling and goes to the food pantry.

I like to shop the ethnic stores and the warehouse stores.  My fruits and veggies have stayed the same, since these places tend to promote bargains over  variety.  I don't go to the upscale stores.  My needs are simple.

I do like a good loaf of peasant type bread, the kind that is crusty and with a darker stone baked bottom, add a little fresh butter...yummy.

I see creeping inflation in toilet paper, soap, drugs, and things like that.  Smaller packages, shaving off the ounces or number of squares.