US Economy Still Steaming

Despite the first half of the article’s headline, America’s economy is far from being on the verge of recession.

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10 Responses to US Economy Still Steaming

  1. Buzzurro says:

    Nouriel Roubini:

    And don’t be misled by better than expected reported same store chain store sales for November this week; those data – as known to all analysts – are distorted by the longer sales calendar in November compared to 2006; whatever gains will be obtained in November will be undone by a payback in December. As Goldman Sachs put it today in a note to clients:

    —————-
    “Same-store sales data for major retailers improved substantially in November. Our Goldman Sachs Retail Index jumped to 4.5% on a year-over-year basis, from 1.2% in October. From this vantage point, it looks like the indefatigable American consumer is spending freely as the holiday season gets underway.

    However, the improvement in monthly data contrasts with relatively tepid weekly reports and declining consumer confidence, and is mostly explained by reporting differences. Some retailers compared a four-week November that ended with the Thanksgiving week in 2006, but included the week after in 2007. The extra holiday shopping days in 2007 boosted sales at these retailers, but will involve a payback in the next release, which will now have fewer holiday shopping days than last year. We estimate this distortion accounted for roughly 2½ percentage points of the improvement in the GSRI…

    The corollary of better November data is a headwind for December retail sales reports. If the effect of over two percentage points is symmetric, then December same-store sales stand a good chance of coming in at or below zero.”
    —————-

    Indeed, according to the UBS/ICSC data that looks at a broader range of retailers than the major ones same store chain store sales fell in 3 out of the 4 weeks of November with the figure in the reporting week ending on December 1st being a negative 2%.

    So the US consumer is indeed at a tipping point and the overall holiday sales will end up showing the weakness in the sector that represents over 70% of GDP. If the saving-less US consumer falters – as it soon will being hit by falling home prices, falling HEW, rising debt servicing ratios, high debt burdens, high oil prices, sharply falling confidence, a slackening labor market – a recession becomes inevitable.

    http://www.rgemonitor.com/blog/roubini/231693

  2. freethoughts says:

    I don’t believe in those who predict distasters. I have never believed in an economic recession in the US this period.

  3. no2liberals says:

    I take the good with the bad.
    Some say there will be a recession, some say there won’t, while others say there are recessionary indicators present. I know many were disappointed that the prime rate was lowered more the other day, by the Fed.
    Regardless, the U.S. economy is massive, and like most massive things it can never be stopped or rapidly accelerated, only the rate of momentum can be effected.
    If indeed there is a recession, it won’t be the first time, and each time we have recovered, there was an economic boom. A good example would be the period of time since we recovered from the Clinton recession at the start of Bush’s administration. We were in a recession, the WTC attacks came, adding momentum to the economic decline, then by 2003, when Bush’s tax cuts were kicking in, we’ve experienced a phenomenal period of economic growth.
    My view is, if bad times are coming, then the good times will soon follow, just like they always have in the past. As long as we are a free nation, including economic freedom, then it will always work out.

  4. no2liberals says:

    pimf=disappointed that the prime rate wasn’t lowered more
    /sheesh

  5. freethoughts says:

    I couldn’t agree more with you. There has never been any recession the US wasn’t able to recover from. On the contrary, what Europe and Italy are going toward is
    an Argentina-like scenario. And Italy won’t recover. Every year, about 2000 graduates move elsewhere to find a job. When I go out, I always hear people complaining about Italy’s economic and social crisis and of how people are fleeing. I’m more convinced than ever that going to the US is the right choice for me.

  6. no2liberals says:

    I have met so many Euro expats at Gates of Vienna, it’s amazing.
    I hope that the EUSSR treaty doesn’t get ratified, or if it does, you are well clear of Europe by the time the loss of freedoms begin.

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  9. julie74bug@aol.com says:

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  10. julie74bug@aol.com says:

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