Positive Economic News

http://www.nytimes.com/2011/10/28/business/economy/us-economy-shows-modest-growth.html?_r=1&nl=todaysheadlines&emc=tha2

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"It ain't brilliant, but at least it's heading in the right direction." (Ian Shepherdson - Economist - on U.S. economic growth in the most recent quarter)

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It's always nice to hear positive economic news: any GDP growth news that cites a movement from 1.3% last quarter to 2.5% (3rd quarter initial) is good news.

Consumers spending more (for whatever the reason) on health care and utilities is much needed. Business investing more is the key to future growth. In the case of business spending, the software part worries me because that's often a substitute for re-employing people or doing the same job with fewer workers. That makes Larry Ellison happy but not the rest of the economy. Businesses spending more on vehicles (part of the current growth) is capital spending which is good, period.

As Ian Shepherdson, chief United States economist for High Frequency Economics, says "I want to see 4%, but given that people were talking about a new recession, I'll take 2.5 or 3." Then, there's the sobering perspective that this level of growth does nothing to reduce unemployment.

Real income is declining, housing prices are stalled and home sales in September were down for the third consecutive month. Personal disposable income (adjusted for inflation) fell 1.7% in the third quarter, its biggest drop since the third quarter of 2009.

So, we need to hear from "Dr. Doom" about this. Nouriel Roubini, chairman and co-founder of Roubini Global Economics, said he expects that the new 3rd quarter growth estimate will be revised downward to 1%. There goes Dr. Doom. He's always bursting the bubble of "hope."

Whatever the interpretation of the "data" implies, it doesn't appear to be "negative" GDP growth. That's something positive.