"So democrats are quite happy to wreck the economy if it helps their chances in the election..." "U.S. Recovery: Not Now, [but] Not Never (Export Development Canada â Peter G. Hall) "Frustration is building. It is now almost two-and-a-half years since the U.S. recession officially ended. We would normally be well into the next growth cycle by now. Not this time. Instead, growth sagged in the summer, unemployment remains stubbornly high, and news is mostly negative. Talk of double-dipping even surfaced amid speculation of long-term stagnation. Will the U.S. economy ever recover? "Talk to the average U.S. consumer, and youâd likely get a resounding âno!â From the recessionary band where it hovered for over 30 months, consumer confidence has taken a rare tumble back into the abject pessimism zone last seen at the height of the financial crisis in 2009. Why so glum? You would be too if widespread financial crisis carved 29% from your real estate holdings, and three years later one-quarter of the housing market was still underwater. Add to that Europeâs woes, a plunge in stock markets and a general sense of malaise, and you get their gloom. But is the gloom warranted? "Consider U.S. housing. With affordability measures at their best levels since the 1970âs, mortgage rates hovering at 30-year lows and vacancy rates for rental properties falling, homeownership is becoming increasingly attractive. Also, construction of new homes is in better shape as new builds take place in regions where demand is heating up. By late summer, there was a 6.6 month supply of new, unsold homes on the market, admittedly well above the 4.5-month stability mark, but a vast improvement over the 12.2-month peak in 2009. The ratio of housing stock to households suggests a return to equilibrium sometime in 2013 â enough to boost 2012 housing starts by a stunning 42%. "Also, check out that U.S. consumer. Radical changes in saving patterns have reduced average debt loads from a peak of 130% of disposable income in Q4 2008 to just 115% by mid-2011, a path that will see debt fall below 100% of disposable income by mid-2012. This is far faster progress than most economy-watchers expected, and will bring increased momentum to U.S. consumer spending next year. In fact, momentum is already building, in spite of the gloom. Real spending â a whopping 70% of U.S. economic activity â is now rising at a steady and sustainable pace. Itâs good news for the U.S., but also for a fledgling world economy in search of a hefty and dependable growth engine. "At the same time, American business has never been in better shape: corporate profits reached an all-time record high of USD1.9 trillion in the second quarter, and corporate balance sheets are flush with over USD2 trillion of cash. Access to credit is also vastly improved, with the Federal Reserve survey reporting six consecutive quarters of loosening credit standards. Commercial and industrial loans grew by USD34.3 billion in the second quarter of this year, and USD22 billion in August alone; at the current rate of growth, business loans will be back to pre-crisis levels in just over a year. But is there any current activity? You bet. In spite of swooning business sentiment, non-defense factory orders are booming, up this year by an impressive double-digit pace. "The bottom line? Cut through the headlines to real U.S. activity, and three solid points emerge: first, the worldâs number one economy is steadily healing. Second, businesses and banks are poised and ready with the ammunition to accommodate a fast-approaching and robust recovery. And finally, just when we needed a bit of assurance amid the volatility and gloom, actual activity levels among U.S. consumers and businesses are rising significantly. Pray that this process doesnât get interrupted."
the problem is that there is no need or demand for another growth cycle. we dont need any more office buildings or retail malls or even housing built. the only spending we need at this time is repair and upgrade of infrastructure that we already have.
That is what the recovery from a bubble looks like. It takes time to work off the excesses. The fact we are going through a debt contraction doesn't help. But the domestic market isn't the only factor. Emerging markets are growing and a source of demand for everything from coal to Cat tractors and Iphones. If we want to have more than a third world economy, we need to come up with policies that encourage those products to be built here.