Economic recovery, while slow, begins to look sustainable

From USA Today:

“Economists are more optimistic about the recovery than they were just a few months ago, significantly upgrading their forecasts for 2011 as consumers open their wallets.

When asked to predict, nine of 10 economists said they’re more optimistic than three months ago, according to a USA TODAY survey of 46 economists conducted Jan. 13-19.

They expect the economy to grow at an annual rate of 3.2% to 3.4% each quarter this year. That’s up from quarterly median forecasts of 2.5% to 3.3% in an October survey.

“This growth is now becoming self-reinforcing,” says Mark Zandi, chief economist of Moody’s Analytics. “Businesses are going to take their stronger sales and begin to hire more aggressively, generate more income, and we’re off and running.”

Zandi expects the economy to grow 4.4% this year. That’s better than last year’s estimated 3% growth, but well short of the 5% to 7% expansion that followed previous severe recessions.

The economists say the more robust growth will help cut the unemployment rate to 9% by year’s end from 9.4% in December. They expect employers to add 200,000 jobs a month by the second half of the year, more than double last year’s rate.

An AP story points out a somewhat less traditional economic indicator: Sales of iPads to business are booming, indicating a new willingness to start investing:

“Splurging on $500 iPads is a sign that the business cycle is starting to turn and that companies are starting to spend a record amount of cash they’ve accumulated. If the trend is real, companies will do what consumers haven’t — spark a strong economic recovery. That could push the Standard & Poor’s 500 index to its third straight year of double-digit percentage gains. The last time that happened: the tech-boom days of the late 1990s.

“”You’re going to see a bigger commitment to growth this year because companies have underspent for quite some time,” says Bill Stone, chief investment strategist at PNC Asset Management.

Financial, technology and energy companies are the most likely to benefit from business spending, says David Bianco, a market strategist at Bank of America. Each group is up about 3 percent this year, nearly one percentage point ahead of the overall S&P 500. Those three groups account for nearly half of index’s value….

“Consumers don’t have the income growth to sustain a more rapid pace of spending,” says Jeffrey Kleintop, a market strategist at LPL Financial. Instead, he says, businesses spending will eventually lead to a pickup in the jobs market.”

Again, we have a long way to go to dig ourselves out of this canyon, and many Americans will never recover either the earning power or the household wealth that they’ve lost in the last few years. But getting better is a whole lot better than getting worse.

Source: Calculatedriskblog.com

Source: Calculatedriskblog.com

– Jay Bookman

582 comments Add your comment

Southern Comfort

January 24th, 2011
12:19 pm

Southern Comfort

January 24th, 2011
12:22 pm

With charts too!!! I’m not feeling as rosy as those economists. I think we’re in for a long, slow recovery. I don’t see 3% per quarter as we don’t have the job market to keep up a pace like that. With the majority of our economy based on spending, there’s going to have to be a lot of jobs added to keep that increase in spending going.

Doggone/GA

January 24th, 2011
12:25 pm

Not exactly on topic, but sort of: “The government collected a whopping $4 billion last year — the largest sum ever recovered in a single year — through its health care fraud prevention and enforcement efforts, according to a new report Monday”

http://money.cnn.com/2011/01/24/news/economy/health_care_fraud/index.htm?hpt=T2

carlosgvv

January 24th, 2011
12:29 pm

I understand a number of states, like Califorinia, are about to go bankrupt. When they come, hat in hand, to Washington for a bailout, what will that do to the economy?

USinUK

January 24th, 2011
12:29 pm

well, as I said to Jay, business investing in iPads is a good thing … just not as good (or as sustainable) as businesses investing in PEOPLE.

Adam

January 24th, 2011
12:30 pm

Good news. I hope it holds and.or gets better.

Adam

January 24th, 2011
12:31 pm

carlosgvv: States can’t go bankrupt. They can have massively unbalanced budgets as long as they are able to borrow their way out of the problem, just like the U.S.

Adam

January 24th, 2011
12:32 pm

Also, I wonder what the graph’s mean line would be if we removed the spike in late 2005 that was undoubtedly due to Katrina?

Doggone/GA

January 24th, 2011
12:32 pm

“When they come, hat in hand, to Washington for a bailout, what will that do to the economy?”

Nothing

Real Scooter

January 24th, 2011
12:32 pm

I don’t know anything about economics but my retirement account is almost back to where it was before the crash. That’s what I think about when it comes right down to it.

barking frog

January 24th, 2011
12:36 pm

A result of the latest fed investment which
which should have been double what it was.

Southern Comfort

January 24th, 2011
12:39 pm

RS

I watch my retirement account like a hawk. Through the entire year of 2008, I lost around $1500. I made that up in the 3rd quarter of 2009. I wish I really knew economics as I think I was just pretty lucky in my guesstimates.

bleary

January 24th, 2011
12:39 pm

How soon before Boehner claims credit for the growth?

USinUK

January 24th, 2011
12:41 pm

“How soon before Boehner claims credit for the growth?”

you mean he hasn’t already?

Mick

January 24th, 2011
12:44 pm

usinuk

Hi, you are really cooking with gas today!!!

Still need more jobs, I’m sure everyone on here has someone in their immediate family that is hanging on by a thread…

Adam

January 24th, 2011
12:45 pm

USinUK: He repealed health care! And… and…. well I’m sure he did something else too

Maybe his tears sprouted the money tree or something.

barking frog

January 24th, 2011
12:48 pm

Southern Comfort

January 24th, 2011
12:39 pm
I wish I really knew economics
———————————–
USinUK might help. I believe she’s a ‘bond girl’.

Kamchak

January 24th, 2011
12:50 pm

I’m waiting for the other shoe to drop.

Maybe even a Payless store full of them.

barking frog

January 24th, 2011
12:52 pm

Kamchak

January 24th, 2011
12:50 pm
——————————————–
The mother of all drops may be in commercial real estate.
Could take down all the Insurance companies.

Normal

January 24th, 2011
12:54 pm

SoCo,
From below…
“I’d rather wear a badge and gun for life as oppsed to a robe.”

No, first you get the robe, then you get a wand and Presto Chango, you are SoCo Potter, Defender of the Downtrodden and Saturday Night Magic Act! :)

Nice Guy

January 24th, 2011
12:55 pm

Kamchak – “I’m waiting for the other shoe to drop”

And which shoe is that?

USinUK

January 24th, 2011
12:56 pm

barking – bond girl? I WISH!!! I have a mad crush on Daniel Craig!

oh. wait. you don’t mean that kind of bond girl, do you?

;-)

Southern Comfort

January 24th, 2011
12:57 pm

frog

I listen and pay attention when she talks economics.

Normal

January 24th, 2011
12:58 pm

barking frog

January 24th, 2011
12:52 pm

I’ve often wondered that since my house has lost almost 25% of its value, why hasn’t my insurance dropped 25% too….

barking frog

January 24th, 2011
12:58 pm

USinUK

January 24th, 2011
12:56 pm
—————————————————————
Actually, I meant both, double entendered there…

Southern Comfort

January 24th, 2011
12:59 pm

Normal

Some days I really, really, really worry about you. And then there’s days, like today, when you make my head hurt from laughing so hard.

Normal

January 24th, 2011
12:59 pm

And which shoe is that?

The one on the right foot that will crush the “average guy” in favor of the rich guy…

jconservative

January 24th, 2011
1:00 pm

Adam – States can indeed go bankrupt. It is legal for them to do so. A receiver would be appointed to manage the state’s debt.

The question is will Congress allow them to do so or will Congress bail them out? My guess is that the Democrats would vote to bail out California and the Republicans would vote to bail out Texas.

Normal

January 24th, 2011
1:00 pm

SoCo,
It’s a gift… :D

barking frog

January 24th, 2011
1:02 pm

Normal

January 24th, 2011
12:58 pm
——————————————–
why should they reduce the premium, they probably won’t pay
face value anyway so to them nothing’s changed…

USinUK

January 24th, 2011
1:02 pm

“Maybe his tears sprouted the money tree or something”

ohmygod, now that’s funny.

@@

January 24th, 2011
1:02 pm

Although on opposite ends of the political spectrum, Paul Krugman and I agree on one thing. Obama’s SotU will fail to address the real problems. It’s a charade.

/drive by/

stands for decibels

January 24th, 2011
1:02 pm

An AP story points out a somewhat less traditional economic indicator: Sales of iPads to business are booming, indicating a new willingness to start investing:

I am reminded of a New Yorker cartoon.

Southern Comfort

January 24th, 2011
1:03 pm

Normal

I’m just glad I had just sat my cup of coffee down. Coffee is a lot harder to clean from my monitor as opposed to water. :)

USinUK

January 24th, 2011
1:03 pm

SoCo and barking – aw! thanks, guys! (blushing)

Normal

January 24th, 2011
1:04 pm

jconservative

January 24th, 2011
1:00 pm

Is there any consensus as to what would happen if Congress just let the States fail?

Do you think it would lead to a domino effect ending only when the 50th State went under?

And if so, what would that do globally?

RB from Gwinnett

January 24th, 2011
1:05 pm

USinUK, you must think Pelosi is a complete idiot then don’t you? I mean why would she be saying they needed to vote on the bill so we the people could see what was in it if it had been posted on line 5 days before. Does she think we’re too stupid to click on the links to it on line or what?

You’re a liar USinUK.

Southern Comfort

January 24th, 2011
1:07 pm

USinner

There’s something to say about a woman using “shop talk”. ;)

Normal

January 24th, 2011
1:07 pm

RB Chill…your venom is making you ugly.

Matti

January 24th, 2011
1:08 pm

USinUK,

Daniel Craig: Yum.

Kamchak

January 24th, 2011
1:08 pm

And which shoe is that?

In the forefront of my mind was what barking frog said, commercial real estate.

Then there’s the issue about banks foreclosing on properties that they didn’t have clear title to. It looks like Countrywide has some ’splainin to do

I think that the stimuluses (stimulae?) just kicked the can down the road, and there is still some pain that we must go through.

Then of course we could be blind-sided.

USinUK

January 24th, 2011
1:10 pm

RB – you wish I was – then you wouldn’t be quite so pathetic.

sadly, I’ve been right about everything I’ve said. they posted the original bill on 9 June 2009 – and they posted every iteration thereafter, including the reconciliation bill on 18 March 2010.

I’ve posted links to prove it – including a link to Fox.

Normal

January 24th, 2011
1:10 pm

Adam

January 24th, 2011
12:45 pm

He SYMBOLICALLY repealed healthcare, but he cried real tears…

USinUK

January 24th, 2011
1:11 pm

Matti – I second that emotion!

Normal – he’s not man enough to acknowledge he’s wrong on this.

Southern Comfort

January 24th, 2011
1:11 pm

Kam

I think there is a lot of pain we must go through. I don’t think the worst has happened yet. As you said, we’ve been kicking the can down the road.

Gran Torino

January 24th, 2011
1:13 pm

“The economists say the more robust growth will help cut the unemployment rate to 9% by year’s end from 9.4% in December…”

Yeah good luck with that. Employers are competing with the government for workers because welfare benefits keep getting extended further out into the future, recently by another thirteen months. In some states non-workers are getting over $500 a week.

When it’s a tossup between working for hourly wages in a fast-food joint or sitting on your fat lazy ass and getting $500 for doing nothing who do think’s gonna win.

Mick

January 24th, 2011
1:14 pm

If the senate had taken up the majority of the bills that pelosi got passed in the house, this recovery would have a hell of a lot more punch.

rb

What’s this fixation with pelosi and the health care bill? It’s the law and so far the more that is known what’s in it, the more people like it rather than vice versa.

Southern Comfort

January 24th, 2011
1:17 pm

When it’s a tossup between working for hourly wages in a fast-food joint or sitting on your fat lazy ass and getting $500 for doing nothing who do think’s gonna win.

Oh :roll:
My :roll:
Freakin’ :roll:
God! :roll:

$1000 a month for unemployment. :lol: Max benefits in GA are around $330 a week. I’ve been there and done that before. Even after taking a job at $7.25 an hour, I still received a supplimental unemployment check until my benefits ran out. That was in 2002, but I don’t think it has changed much since then.

USinUK

January 24th, 2011
1:17 pm

SoCo – 1;17 – the lie lives on … people are staying at home because they’re getting rich on unemployment!!!

getalife

January 24th, 2011
1:22 pm

Obama saved capitalism.

larry

January 24th, 2011
1:22 pm

The economists say the more robust growth will help cut the unemployment rate to 9% by year’s end from 9.4% in December. They expect employers to add 200,000 jobs a month by the second half of the year, more than double last year’s rate

I wonder if that will include Georgia, where the unemployment rate has been higher than the national rate for 39 straight months. (Oct. 2007).

Southern Comfort

January 24th, 2011
1:23 pm

USinner

You know!! All those people taking their unemployment checks and investing that money into the stock market or socking it away in rainy day fund accounts. Those people should be working for that money!!! How dare they!!!

Normal

January 24th, 2011
1:23 pm

USinUK

January 24th, 2011
1:17 pm

…and a chicken in every pot…

Guy Incognito

January 24th, 2011
1:23 pm

WASHINGTON — Chinese-born pianist Lang Lang gave a musical shout out to America-hating patriots in his homeland when he played at the White House state dinner last week.
Chinese President Hu Jintao, the guest of honor at the dinner, surely recognized the melody. The song has been a favorite anti-American propaganda tool for decades.

And our current administration just clapped and clapped and clapped………wow:-(

Lang apparently knew exactly what he was playing.

Jimmy62

January 24th, 2011
1:24 pm

But you and Paul Krugman told u we wouldn’t recover because we didn’t waste enough money, so how can this be?

Just think, we mighta recovered even faster if we’d wasted even less money bailing out failures and helping them avoid the consequences of their mistakes.

barking frog

January 24th, 2011
1:25 pm

chickens are probably anti-pot..

Jimmy62

January 24th, 2011
1:26 pm

Unfortunately this is false hope. The real damage, as the rest of the world discovers our government has turned our currency into monopoly money, has yet to come.

USinUK

January 24th, 2011
1:26 pm

oh, and RB, dear, since you don’t like HuffPo, here’s the text as posted in June 2009

http://keithhennessey.com/wp-content/uploads/2009/06/kennedy_health_bill_draft.txt

Normal

January 24th, 2011
1:26 pm

Southern Comfort

January 24th, 2011
1:23 pm

Didn’t they used to complain about the unemployed/wellfare folks going out and buying lottery
tickets? I guess now they are too lazy to even do that…

Southern Comfort

January 24th, 2011
1:26 pm

chickens are probably anti-pot..

Not if the potency is high enough. ;)

TaxPayer

January 24th, 2011
1:27 pm

States cannot currently go bankrupt but local governments can and have. However, Newt was pushing for legislation last November to allow states to go bankrupt (so they came back out of their pension commitments amongst other things) and about that same time, muni’s started selling off big time and they’re still dropping. Look at MUB for example.

USinUK

January 24th, 2011
1:27 pm

Normal and SoCo – I believe that’s a chicken in every potPIE

Southern Comfort

January 24th, 2011
1:27 pm

Normal

LOL!!! Maybe they’ve discovered mail order lottery tickets, cigarettes, and booze.

USinUK

January 24th, 2011
1:28 pm

and with that, I’m calling it a night …

with the new sched, I’ll see you again on Fri

until then, have a good evening – stay warm and, if it snows again this week, drive safely!

Union

January 24th, 2011
1:29 pm

*** off topic ***

breaking news.. “Court rules that Rahm Emanuel not eligible to run for mayor of Chicago.”

lmao.. thats just too dang funny

StJ

January 24th, 2011
1:29 pm

Recovery is “sustainable” until $5 per gallon gasoline hits the ol’ wallet, anyway…then we’ll see.

barking frog

January 24th, 2011
1:29 pm

USinUK

January 24th, 2011
1:27 pm
Normal and SoCo – I believe that’s a chicken in every potPIE
——————–
Not the beef pies, I hope…

Ragnar Danneskjöld

January 24th, 2011
1:30 pm

While I agree that a disciplined conservative Congress would be less likely to wreck the economy through wild spending comparable to that elected in November 2006, there is not much evidence that the current Congress has the votes – especially in the Senate – to undo the damage of the last four years. The private economy is hostage to a renegade government.

Normal

January 24th, 2011
1:31 pm

USinUK

January 24th, 2011
1:27 pm

Not to many chicken pot pies I’ve ever tried had ANY chicken in them… :)

Southern Comfort

January 24th, 2011
1:27 pm

So that’s what happened… :lol:

Southern Comfort

January 24th, 2011
1:31 pm

USinner

I could just go to the World Congress Center and ask around to find out for sure.
http://www.ipe11.org/

Normal

January 24th, 2011
1:32 pm

‘Night USinUK :)

Bosch

January 24th, 2011
1:33 pm

Looks like Rahm Emanuel left the White House for nothing….

Mick

January 24th, 2011
1:35 pm

I can’t muster much sympathy for rahm….

Southern Comfort

January 24th, 2011
1:35 pm

Bosch

Oh well, that’s life.

Normal

January 24th, 2011
1:36 pm

Bosch

January 24th, 2011
1:33 pm

Maybe it’s for the best. “Rahm Emanuel” sounds vaguely anti-religious, somehow, don’t you think?

jm

January 24th, 2011
1:36 pm

great. the iPad economy. What will we do when everyone gets bored of iPads? :)

Bosch

January 24th, 2011
1:39 pm

Mick, SoCo, and Normal — I think it’s pretty damn funny myself.

Kamchak

January 24th, 2011
1:39 pm

Hey Bosch, I just got an email from The Beat. It seems they are hosting the Atlanta Major League Soccer Challenge between the Houston Dynamo, the New England Revolution, and the Columbus Crew.

Scout

January 24th, 2011
1:40 pm

Debt, Debt, DEBT !

Mick

January 24th, 2011
1:40 pm

bosch

What goes around, comes around. Tough luck effin retard….

Bosch

January 24th, 2011
1:41 pm

Kamchak,

When? And have you heard if they are having a hoopla hosting thing ( I can’t remember the thing they actually call it) at the Dome this summer? You know, like when Club America played?

Southern Comfort

January 24th, 2011
1:41 pm

jm

Buy the iPad 2.0? :)

Bosch

I agree. I got more excited over seeing the barbeque cheetos than I did about Rahm running for mayor.

Paul

January 24th, 2011
1:41 pm

I’ll keep predicting this until it inevitably happens.

The abnormal cycle will continue and we’ll get better. It’ll be notably better going into the 2012 elections, at which point bloggers, pundits and Republican politicians will say “See? The economy got better right after we cut taxes for the wealthy!!!!”

And then we’ll have another myth that will become fact and endlessly repeated.

Mick

January 24th, 2011
1:42 pm

scout

Do I have your blessings to continue to blog here or do I have to start camping out in georgia?

Bosch

January 24th, 2011
1:42 pm

You better watch out Mick — Rahm seems the type that would break your legs over a statement such as that.

Southern Comfort

January 24th, 2011
1:44 pm

Scout

Saw your post downstairs and left you a response.

Bosch

January 24th, 2011
1:44 pm

SoCo,

:lol:

” I got more excited over seeing the barbeque cheetos than I did about Rahm running for mayor.”

Yeah, for me — I was more excited to find out that chicken livers are like a dollar and I can feed those to the pups!

Bosch

January 24th, 2011
1:45 pm

OMG, is Scout making hit lists again?

Mick

January 24th, 2011
1:46 pm

bosch

He might be mightier than I with his foul mouth but I could take him with both hands tied behind my back blindfolded…just call me bigfoot..

stands for decibels

January 24th, 2011
1:46 pm

Rahm seems the type that would break your legs over a statement such as that.

You do realize that Mick was QUOTING Rahm, yes?

barking frog

January 24th, 2011
1:46 pm

The law is what the last judge says it is. Rahm has
a couple of judges to go.

stands for decibels

January 24th, 2011
1:47 pm

Scout making hit lists again?

that sentence is missing an “s”.

jm

January 24th, 2011
1:48 pm

How does one go about finding a job in Singapore or Asia?….. just curious, purely for academic reasons of course.

@@

January 24th, 2011
1:50 pm

I wouldn’t wanna be Rahm’s attorney

Yeesh!

I wonder if his opponents used the same techniques Obama did during his senatorial campaign–seeing to it that his opponents were removed from the ballot.

It’s the Chicago Way.

barking frog

January 24th, 2011
1:51 pm

jm

January 24th, 2011
1:48 pm
———————————-
google knows all..

Kamchak

January 24th, 2011
1:51 pm

Bosch

Matches will be held Wednesday, March 9th at 7:30 (New England vs. Columbus), Friday, March 11th at 7:30 (Houston vs. Columbus), and Sunday, March 13th at 2:00 (Houston vs. New England).

Prices are as followed:
Super Suite/On-Field VIP: $100
Center Circle $50
West Sideline $30
General Admission $20

Ticket office: 678-298-4780

They are offering me a chance to buy my seat one day before they go on sale tomorrow at noon.

As for any other matches at the dome — I ain’t heard nuthin yet, but I would be at all surprised. The European clubs have found the the U.S. market is quite lucrative for them during the off season

Kamchak

January 24th, 2011
1:53 pm

That should be “wouldn’t” be at all surprised.

Adam

January 24th, 2011
1:55 pm

In some states non-workers are getting over $500 a week.

And some places have people netting homes for $1000! Call right now to get one yourself! It’s 1-900-YOURE-GETTING-SCREWED. That number again is 1-900-YOURE-GETTING-SCREWED! CALL NOW!

jm

January 24th, 2011
1:56 pm

barking frog – indeed it does….

Southern Comfort

January 24th, 2011
1:57 pm

LMAO @ Adam!!!!!