4 reasons to be positive about the economy
Jonathan Sweet, Editor-in-Chief
October 12, 2012
Filed under Jonathan Sweet
Despite being three years past the “official” end of the recession, there’s no doubt most of us have not been feeling it in this less-than-robust recovery. But let’s focus on the positive. Here are four reasons you should feel confident about a better economy in 2013 and, hence, a better year for boating.
- Consumer confidence – While there has been some variation across the various indices, the general trend has been upward for the last several months. Today’s Thomson Reuters/University of Michigan preliminary October consumer sentiment index hit 83.1, the highest mark since September 2007. In an economy where two-thirds of GDP is driven by consumer spending, this is key to any recovery – and a bit of a self-fulfilling prophecy. The better consumers feel, the more they spend, which just leads to more confidence and more spending.
- A housing comeback – Home prices and sales in most markets are heading back up. Foreclosures are down. No, they’re not at boom levels, but we’ve clearly hit the bottom. For the first time in years, housing will be a significant (positive) contributor to GDP. A record number of 103 cities are on the National Association of Home Builders’ Improving Market Index. And don’t get distracted by the inevitable month-to-month drop in prices this fall that some will use to call foul on the housing recovery. That happens every year. Look at the year-over-year numbers.
- Employment – It’s been slow, but the unemployment numbers are headed in the right direction. And yes, there are issues with the way they are calculated (i.e., when you stop looking you’re not unemployed), but that’s the way it’s been done for years. No one’s cooking the books.
- The election – No matter who wins, the end of campaign season can only mean good things (unless you own a TV station) for several reasons. One, something might actually get done in Washington to avoid the so-called “fiscal cliff” once Congress is focused on re-election. Two, we won’t have every challenger out there telling people how horrible the economy is. Finally, just removing the uncertainty from the equation will move people to make decisions in their personal and business lives.
Update: Bonus reason No. 5
Shortly after I posted this blog, Bloomberg posted its Economic Surprise Index (who knew there was such a thing?), which shows a lot of other positive trends in the economy. Definitely worth checking out.