Turning an economic corner?
September 10, 2013 - LM Editorial
In this space, I have often cited the (interminable) changing nature of the economy. In many cases, it is hard not to do, given the bumpy ride we have been on for more than five years at this point.
It is hard not to say that when we look back at this current point in time, when, hopefully, there is more consistency and steady growth than there is now we will all exhale and reminisce about this era and wonder how we did not all go stir crazy wondering what was going to happen next.
Well, I try to be optimistic by nature and I am “pretty sure” I am not crazy, but it appears that there are some encouraging things happening on the economic front that maybe, just maybe, could be cause for some long-term optimism.
One example of this is a recently revised second quarter GDP number to 2.5 percent from 1.7 percent. It is clear we need a stronger GDP number to increase economic activity and gain more momentum, but it still is a step in the right direction.
Of course, there is ongoing progress being made in the automotive and housing markets, too, which has a direct effect on economic activity and manufacturing appears to have regained its stride, as outlined in the last two months of encouraging data from the Institute of Supply Management’s Manufacturing Report on Business.
While these things are occurring and are obviously positive, some key takeaways from the Port Tracker report by the National Retail Federation and Hackett Associates helped me to regain a sunnier economic outlook.
The report highlighted how September volumes at United States-based retail container ports to are expected to increase 5.1 percent annually in September, with retailers preparing for the holiday season, as retailers are making up for the slow imports seen earlier in the year, noting that while it’s too early to predict holiday sales, merchants are clearly stocking up.
Hackett Associates Founder Ben Hackett said in the report that the U.S. economy is on the road to sustained growth, with second quarter GDP of 2.5 percent beating expectations, coupled with an improving unemployment outlook, with consumer spending expected to increase in the fourth quarter.
What’s more, he observed that the inventory-to-sales ratio is relatively high although it has not shown any indicators that it is rising, which could lead to a decent Peak Season this year with increased shipment activity.
In an interview, Hackett said that Middle Eastern conflict aside, the economic picture is looking good, even with a decline in consumer confidence in August.
“It seems that people are feeling like they have more financial security and are starting to spend more money,” he said. “Housing is up, and people are feeling less under threat than they have in the past.”
And even though many claim it is a thing of the past, Hackett said there is likely to be some semblance of a Peak Season later in September and into October, which is traditionally the busiest month of the year for import activity. This is due in part to the National Day celebration in China from October 1-7, which is likely to spur early orders into the U.S.
Data like this helps to provide some economic optimism for the home stretch of 2013 and beyond. At the same time, though, we never truly know what is going to happen until it happens—but at least we are able to feel good, or a little better, about things for now, too.
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