Current economic situation: A look backward, and ahead
Let's take a look backward and forward at some leading economic indicators as a way of trying to figure out where we are and where we're going.
First, let's look backward.
Here's a terrific graphic that The Post's Business section did today, comparing unemployment, consumption and industrial production during this recession compared with the four previous recessions.
Takeaway: If you had any doubt that this recession was the worst since the Great Depression, this graphic should put that doubt to rest.
According to the Conference Board's monthly index of leading economic indicators out this morning, slow growth in the U.S. economy should occur during the first half of 2010.
The index ticked upward 0.3 percent in October, following a 0.1 percent gain in September and a 0.4 percent gain in August (fueled by Cash for Clunkers).
“The data indicate that economic recovery is finally setting in. We can expect slow growth through the first half of 2010. The pace of growth, however, will depend critically on how much demand picks up, and how soon,” Ken Goldstein, a Conference Board economist, said in a statement.
Remember this, though, and I can't stress this strongly enough: Most of this recovery so far has been driven by government stimulus -- Cash for Clunkers, the first-time home-buyers' credit, $787 billion in stimulus spending and so forth, while precious little attention has been given to long-term growth stimuli, such as tax cuts for employers.
The best quote on this whole situation still comes from Art Hogan, chief market strategist at Jefferies & Co., who told me the following when the Dow passed back up through 10,000 in October: "My biggest concern is much more akin to taking the IV tube out of the patient. We have to move from an economy that is stimulated by the government to an economy that's self-sustaining. That needs to be orchestrated extremely carefully."
-- Frank Ahrens
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November 19, 2009; 10:46 AM ET
Categories: The Ticker | Tags: Art Hogan, Jefferies, economic indicators, stimulus
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