Edgy about the economy
September 29, 2011
One of my favorite movies is the Paul Giamatti classic “Sideways.” Given the type of movie it is, that title makes perfect sense.
But when it comes to the economy, the term sideways is also perfectly appropriate, too. How else is there to explain the constant state of “sameness” on a month-to-month basis? This sentiment could apply to several economic indicators like retail sales, industrial production and transportation volumes to name a few.
But that is merely just pointing out the obvious at this point. Since the recession “ended,” there have been glimmers of hope here and there, whether it be housing starts up one month or consumer confidence trending up another month. Now, if these things were happening en masse with some sort of meaningful consistency we would really be on to something. Wishful thinking, I know. But we really need to aim high at this point. Why shouldn’t we, right?
Even though we all want to aim high when it comes to an economic rebound, that pesky reality thing always seems to get in the way.
For example, we learned from the Department of Commerce this week that durable goods orders in August were down 0.1 percent after rising 4.1 percent in July and August inventories reached a record $365.3 billion, which a Reuters report pointed out should support third quarter growth. But the thing is it could also lead to another inventory overhang in early 2012, when retailers slashed prices to burn off what people did not buy during the holiday shopping season.
This was not a pleasant experience then and there is nothing to suggest it would be any better now, especially when we continue to be stuck in neutral—while Congress alternatively sits on its hands (and periodic good ideas to resuscitate the nation’s economic health routinely sit idle before eventually being forgotten about, it seems).
On the plus side, Commerce reported that in the second quarter the U.S. economy grew at a revised rate of 1.3 percent. While this figure is far from stellar—or what is really needed—it indicates slow growth is occurring instead of a recession, according to the Federal Government. It also outpaces the first quarter GDP number, which limped along at a rate of 0.4 percent growth.
Clearly, we need to crawl before we walk when it comes to the economy, but so much more needs to be done. Regardless of your political leanings, there are some decent ideas and proposals on both sides of the aisle. Getting them out there to make a difference in our prospects for future growth is missing and does not seem to be coming our way anytime soon, though, unfortunately.
There have been signs and anecdotal reports that Peak Season prospects are fair at best, but should that prove to be erroneous and things fare better than expected, that would be a nice launching pad for 2012 and beyond. Oh, wait, 2012 is an Election year so hold that thought.
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