Professionals' optimism rising.

Discussion in 'Politics' started by Ricter, Oct 27, 2009.

  1. Ricter


    Leading indicators improving, the stimulus is working.

    "U.S. Firms Expected to Hire, Invest More: NABE Survey
    (RTT News)

    American companies are witnessing an increase in demand and profits and for the first time in an year are planning to hire and invest more money over the next six months, an indication that the economy is growing in the third quarter after a nearly three-year recession, a private survey shows.

    In the latest industry survey released Monday, the National Association for Business Economics (NABE) said for the first time since October 2008, more business leaders and economists polled in its third-quarter industry survey reported a rise in capital spending over the previous quarter, instead of a decline.

    Industry demand witnessed a rise in the services sector during the July-September period for the first time in five quarters, with growth seen in goods producing, finance, insurance and real estate, among other sectors, NABE said. However, the survey showed demand conditions in the transportation, utilities, information and communications industries continued to fall.

    Nearly 44% of those polled say demand has increased within the last three months as against 26% in July, while 21% reporting a decrease and 35% say no change was recorded.

    Also, the percentage of businesses expecting to add employees over the next six months exceed those cutting jobs for the first time since the recession began by 4 points, the first positive reading since July 2008.

    The survey, conducted between October 1-12 in which 78 NABE members participated, says the improved optimism had pushed its net rising index (NRI) for demand to 23 in the July-September quarter, the first time it had risen in five quarters. In July the index that represents the percentage of respondents reporting rising demand minus the percentage reporting a fall was at -5.

    The survey showed a major chunk – 51% – of the business that participated said the Federal stimulus hadn't any effect, while a substantial portion – 38% – reported higher sales as a result of the stimulus. This section is more optimistic about the future after sales, prices and profit margins all firmed since the previous survey was taken in July, the report showed.

    Meanwhile, a large but decreasing percentage of respondents continue to indicate that credit conditions had a negative impact on their business during the third quarter of 2009, compared with the prior period.

    All 78 NABE participants indicated that business decisions are being influenced with the expectations that the economy will expand in the coming year with some 73% of companies expecting real GDP to expand between 1% and 3% in 2010.

    Commenting on the NABE survey, William Strauss, a senior economist at the Federal Reserve Bank of Chicago who analyzed the results, said in a statement that the survey "provides new evidence that the U.S. recovery is under way."

    The survey came as U.S. GDP figures for the July-September period, due for release Thursday, are expected to show that the economy expanded at about a 3% annual rate after contracting for four straight quarters, boosted by government stimulus.

    It also came as the U.S. economy, the world's largest, has pruned 7.2 million jobs since the recession –worst downturn since the Great Depression of the 1930s – began in December 2007, and unemployment touched a 26-year high of 9.8% in September, according to figures from the Labor Department."
  2. Beware the Ides of March.

    In other words, look for relatively dramatic softening in Dec through April.

    Where we go from there is the subject of much speculation.

    I will say this; there really is no normal or model to contextualize how lumpy and uneven growth and economic activity will be when the U.S. has a real unemployment rate that may run as high as 20% (or more - by the time underemployed, discouraged workers, and those dropping off of unemployment insurance rolls are added to the tally. This doesn't even speak to the millions of Americans working for a fraction of their former wages, with no or few benefits such as health insurance or any 401(k) or pension benefits).

    There will be a wicked political debate about stimulus II, whether they call it that or not, and it's going to leave many incumbents vulnerable in the 2010 elections.
  3. Ricter


    Admittedly, where we are today is bad. But we have been there before, and some of our best years followed that time. We can do it again.