I am still unconvinced that a recession over the next 12 months is off the table.So i spend lots of time looking of evidence that argues the economy is improving.

The latest find is this set of charts in the WSJ last week:

The U.S. Economic Recovery Shows Signs of Accelerating, but Still Has Lots of Ground to Cover

Click to enlarge:


More charts after the jump




Source: WSJ

Category: Economy, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

20 Responses to “U.S. Economic Recovery: Signs of Acceleration?”

  1. Thx, Barry! It would be nice to see a chart showing a comparison of actual consumer spending vs consumer optimism in this list…and a chart showing foreign investment.

  2. marathoner says:

    I’d buy that housing chart with a tight stop

  3. VennData says:

    Consumer polls do not have much statistically significant predictive power of consumer spending.

    What the ‘flood of money is the only thing keeping markets alive” school forgets is that the stock market is a closed system, when someone buys, someone must sell.

    Last year had no gain in the markets. One could say that it was understandable after two great years. Then it is also understandable that this should be a good year, following an S&P500 2011 gain of zero. However, there is the same low level of statistical significance.

    Will America stop being America is the best question. It hasn’t in the minds of the people who missed the rally due to fear of the 2008 elections. Those folks want the market to go back down 1) so they can buy and 2) so they can finally be right. Ego, in other words is not allowing them to profit. I’ll take those profits, thanks very much.

  4. Bob A says:

    how about charts for auto sales and actual and planned travel and home remodel/upgrade expenditures?

  5. bart says:

    U. Mich consumer sentiment vs. personal income annual change rate:


  6. J. Francis says:

    Great chart series BR, keeps things in perspective.

  7. Sechel says:

    I guess my question is how long before the effects of Europe are felt in the U.S.?

  8. Old Rob says:

    These charts (at least the first one) are just a re-presentation of the ones frequently posted at the CR blog. Nothing new here.

    The most important takeaway is BR is cautiously optimistic. When he is upbeat; I am upbeat.

    With lumber and gypsum board picking up (from February and January respectively) from recent lows, maybe the housing bottom will be earlier that 2014. OR, maybe there is too much money in the system and speculation is returning. We need a ‘sanguineity’ chart (U of M chart?).

  9. AtlasRocked says:

    With 7% of the GDP getting put on the national credit card for 4 years running, it’s pretty easy to understand our GDP might be improving at 2%. Other than during a nice productivity boom in the 90s, the 30 year trend line is it takes more stimulus ( or tax cut ) every year to maintain traction.

    The key for now is forget the longterm viability of such a scheme, don’t ponder how Keynesian stimulus has a 100% long term failure rate of failing to generate a lasting, pay-back recovery. Just make money off the scheme and try to get out before it collapses. That’s what all the bankers are doing.

  10. blackjaquekerouac says:

    “waiting for Godot.” eventually there will be a “recovery we can believe in”…but not until those debt and deficit numbers turn solidly around. and that’s just for the Federal Government. State and local are really being hit hard here–and not helped by the decimation of incomes from a “stealth inflation” that has continued unabated for decades now. Sorry but Barry you wrote the book on it so you should know: “bailouts don’t equal recoveries.” the fact the a once in a lifetime “economy of scale” happens to be upon the USA through the continued build out of the nat gas paradigm and cloud computing revolution is still not enough to “lift all boats.” the irony that soaring oil prices is proving to be the best time ever to invest in the overland transportation sector should be lost on no one of course. and this of course is reflected in the only forward looking indicator posited for a recovery above…namely equities. everything else “is subject to change without notice.”

  11. crunched says:

    Recession definitely happening… I suspect we’ve seen the final top in the stock market of this three year run. Unemployment is now back up to 9.0


  12. Petey Wheatstraw says:

    I’d say we’re congratulating ourselves for successfully stepping over a land mine — momentarily forgetting that we are still in the dark and surrounded by a very expansive minefield of our own creation.

    Atlas Rocked:

    “Just make money off the scheme and try to get out before it collapses. That’s what all the bankers are doing.”

    I agree, somewhat (and, Lord have mercy, that’s a first). OTOH, I don’t think it’s necessarily proper to follow the lead of the bankers, as I was taught that just because someone — even everyone — doing something wrong is no excuse for joining in. Schemes fail. This is where our country lost its way.

    A very wealthy homebuilder once asked me if I’d rather be right or rich (shortly after he complained that Sarbox had removed his shield of culpable deniability). Being that I have to look at myself in the mirror every day (and at the faces of my son and grand kids), I decided I’d rather be right and comfortable both financially and in my own skin. Call me a fool. (BTW, that builder is nowhere near as wealthy as he once was, and he has lost many friends who invested in his company after the IPO. He still parties on, but his circle of friends is much smaller, and consists primarily of employees who can’t afford to cut the ties that bind them together).

    I believe it sucks much more to be him than it does to be me.

  13. philipat says:

    On the one hand, The Dow is a forecasting mechanism.

    On the other hand ECRI (Achuthan) continues to stick by its forecast of another recession (Why do some folks still talk about a “Double dip”??!!)

    I have a strange feeling that the market has it right this time. There is just too much negativity around. Either way, all should become clearer over the next 2-3 Months.

  14. Randel says:

    A medical doctor looking at these charts would conclude the patient is getting better after trillions of milligrams of medicine, but the top chart still concludes the patient is in a serious Jobs Depression. Quit calling it the Great Recession.

  15. constantnormal says:

    I think that what we’re seeing here is the completion of the splitting of a more-or-less united economy into two economies, one made up up the dispossessed, those who have pretty much lost all hope of ever again paticipating in The American Dream — and the other half, which slid through the recent unpleasantness relatively unscathed, and are scrambling to restore the little they have lost via missing wage increases and reduced home valuations.

    It is this second economy that is generating all the gains. And being only about half the numbers of the former more-or-less united economy, it’s going to take them a while to restore housing demand.

    But hey, it’s still a recovery. How long it lasts and how high it goes is anybody’s guess, but if you’re in the Good Economy, things are clearly looking up.

    If you’re in the Other Economy, not-so-much. But folks in that economy are probably not reading TBP.

    It would be nice to see United America once more, but it’s Bananamerica now, and probably will be for at least a generation.

  16. For those of us monitoring forward looking long-term data sets, the first warning of a Spring 2012 slowdown appeared in July 2011. In August TRI revealed it rapidly deteriorated to a multi-month contraction: http://trendlines.ca/TrendlinesRecessionIndicatorUSA110829.png and prompted the race by Rosenberg, Hussman, Mauldin, Roubini & ECRI to be first with TEOTWAWKI declarations.

    Had they waited ’til the end of September, they would have seen this was an anomaly. The couple of bad signals was not confirmed by later broader data. But the dye was set and reputations on-the-line. Nobody wanted to admit to their false positives. Secretly they hoped the Eurozone or Iran would blowup and save their asses. It was not to be. With the failure of their 2011Q3 cycle trough call, this past week saw ECRI announce a new contraction … this one starting in 2012Q3.

    Meanwhile TRI surprised with news the Q2 trough was looking less and less severe with each monthly update. By December the trough was postponed to April and less shallow. Today, TRI and its quantification of 14 data sets shows the GDP trough is a 1.5% pace … in May.

    The business cycle moved from Recovery mode to Expansion mode in October and clearly illustrates the economy has the critical mass to move forward albeit in a less robust pace than desired – which is why the FRB continues to be accommodative.

    TRI charts: http://trendlines.ca/free/economics/RecessionIndicatorUSA/USA-TRI.htm

  17. mgkurilla says:

    Given that employment is still way down, but industrial production didn’t take as much of a hit, one has to conclude that job losses were greater in non-industrial areas. Clearly residential construction is off and likely to stay off for a while given the housing situation. I would also expect that ancilliary service related activities like lawn care and house cleaning are still feeling a pinch. Aggregate figures don’t offer perspective on what are likely to be primary versus secondary employment opportunities.

    As our economy has evolved, I’m not convinced that the traditional measures have as much meaning. It woudl seem that indsutrial production does not reflect the overall health anymore. I wonder how many other traditional measures are failing, but still are relied upon to steer the boat.

  18. derekce says:

    The US economy would be looking very promising, even housing looks about to turn, if Europe wasn’t such a mess. The downside of a global economy is their problem is also your problem and it looks like they insist on pouring more water on their grease fire.

  19. Bruce Seaman says:

    I was wondering if taking the starting point for data sets in 2008 is either fair or realistic given the bubble-inflated state of things in 2008. Are we saying that 2008 is a realistic level for a “normal” economy (post-bubble) or is there a better benchmark (or set of benchmarks) for defining a stabilized and rebuilding economy? And is that what we’re seeing above?