Indicators Show Economy’s on Right Course
At this point, the economy is improving faster than either the markets or the Federal Reserve can believe. MarketWatch reported that there was a wealth of data released today (May 15), and while not all of it was positive, most was.
Jobless claims are now back to pre-recession levels — at levels suggesting good jobs growth going forward. Inflation isn’t always good news, and there’s no real joy that food prices are rising. But so-called core prices — which are a good barometer of future inflationary trends — are moving off the low levels from the winter, which suggests companies are confident enough to raise prices.
Manufacturing sentiment was solid in two surveys, and while industrial production was down, the vast majority of that slippage was due to utilities output returning to normal.
The one area of weakness came from a housing survey,as building sentiment slipped. In some way, though, the fact the economy can keep moving without housing demonstrates its health. And as credit thaws and the after-effects of last summer’s mortgage-rate spike die down, housing should eventually regain its legs, though hopefully not to bubble levels of 2006.
Putting it all together, it means the job recovery is picking up, and that eventually (not yet) will lead to wage growth. In any case, the long-depressed U.S. economy is returning to normal.
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