AFTER TOUGH 1ST QUARTER U.S. ECONOMIC OUTLOOK STILL GOOD

AFTER TOUGH 1ST QUARTER U.S. ECONOMIC OUTLOOK STILL GOOD

Here is a well written article from the New York Times that takes a marco look at the economy and where it stands from a historical prospective. And they see good things despite what has happened thus far this year. It shows that historically nominal Growth Domestic Product declines for a quarter when recovering from a recession, something that has happened only 16 times (before this year) since 1947 when they started keeping this statistic. It has happened in every one of the last 7 recessions. It points out the reasons for that happening again are unlikely to repeat themselves, mainly poor weather and low inventory levels. Here is an interesting take on consumer confidence: prior to June the amount of consumers who thought the economy was bad exceeded the amount who thought it was good for 76 months straight. That is the longest period of negative consensus in history. Things seem to be going in the right direction but as we all know economic recovery is regional and quite uneven. It is not uncommon to have one city thriving next to one or two who are struggling mightily. Thinking optimistically, I believe the economy will continue to improve slowly and steadily. There will be bumps in the road and certain events can change everything in a moment. Right now those things are the turmoil in Irag, which has the potential to drastically affect gas prices, and war with Iran, which is looking more possible now that the nuclear talks are failing. Both of these problems are long term so don't expect a wild change overnight but it could happen. One major attack on the right oil field in Irag or a first strike against Iran by either the U.S. or Israel would trigger it. As always thanks for reading and have a great day.