Continuing my call-me-naïve series on hope and optimism for our economy, here are the latest “optimalistic” economic and financial indicators. (For a definition of “Optimalist,” please click here.)
WARNING:
For professional, unfiltered economic and financial information and advice, please consult the real experts, on TMV or elsewhere.
For gloom and doom about our economy, for hopes for its failure, for “evidence” of how the economy is going to hell in a hand basket, etc., please listen to Rush Limbaugh, or watch Fox News..
The Markets
Today, the stock market rose again, capping the S&P 500’s longest weekly winning streak since 2007! It is now up 28.5 percent since the bear market closing low of March 9.
The Dow was up 22.7 percent over the past six weeks, ending the best six weeks since July, 1938!
The technology-oriented Nasdaq Composite Index was up 2.63 at 1673.07, the longest weekly gaining streak since the seven week run ended Dec. 2, 2005!
Advancers outnumbered decliners by a ratio of about 2 to 1 on both the NYSE and Nasdaq.
The markets were helped, according to Reuters, by a reassuring report on the mood of consumers and stabilization in General Electric and Citigroup’s quarterly results.
More from Reuters:
The Reuters/University of Michigan survey [see below] showed that U.S. consumers have more confidence in the economy than they have had since the sudden collapse of Lehman Brothers in September, the latest in a spate of data suggesting the economic slump may be easing.
GE and Citigroup both posted better-than-expected results, lifting the broader market, and bank stocks rallied as investors bet other financial companies could follow up with more news showing the sector is on the mend.
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.“The rate of deceleration in the economy is slowing,” said David Lutz, managing director of trading at Stifel Nicolaus Capital Markets in Baltimore.
“From a macro standpoint, the reason for a lot of the drive is just that we’re continuing to get data points that show things are beginning to operate very well in the credit markets.”
Back to the Reuters/University of Michigan survey on Consumer Confidence, Bloomberg.com reports:
Confidence among U.S. consumers advanced to the highest level since the bankruptcy of Lehman Brothers Holdings Inc. pushed the economy deeper into the recession.
The Reuters/University of Michigan preliminary index of consumer sentiment rose to 61.9, the second straight gain, from 57.3 in March. The index reached a three-decade low of 55.3 in November.
Today’s report reflects signs that the longest U.S. recession in the postwar era may be easing. An improvement in confidence may help temper the slide in consumer spending, which accounts for 70 percent of the economy, and boosts the odds that the economic slump will end this year.
“The darkest phase of the recession is behind us, according to consumers,” said Jonathan Basile, an economist at Credit Suisse Holdings Inc. in New York, who had the closest forecast for the sentiment index in a Bloomberg News survey. The April level is still “very consistent with a sluggish consumer profile” and a full economic recovery is “not under foot right now.”
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In the report, the expectations gauge — which more closely predicts the direction of consumer spending — rose to 58.9, also the highest since September, from 53.5 in March. A measure of current conditions, which reflects Americans’ perceptions of their financial situation and whether it’s a good time to buy expensive items such as cars, increased to 66.6 from 63.3.“The economy is still weak but it’s not declining at quite the rapid pace it was,” said David Sloan, senior economist at 4Cast Inc. in New York, who had projected sentiment would reach 61, the second-closest forecast in the Bloomberg survey. “We should probably see the report as a sign people are getting a little less pessimistic, and that’s the message we’re getting from a number of recent indicators.”
Bloomberg on the housing market:
Evidence that the housing market is reaching a bottom may be helping to lift Americans’ spirits. The National Association of Home Builders/Wells Fargo confidence index this month rose to the highest level since October, the group said this week. The Commerce Department said yesterday that builders broke ground on 358,000 single-family homes at an annual rate in March, unchanged from the prior month.
On unemployment:
The number of Americans applying for first-time jobless benefits unexpectedly dropped last week to the lowest level in almost three months, the Labor Department said yesterday. Even so, the total number of people collecting benefits jumped to a record 6.02 million, suggesting that while companies may not be firing as many people, they’re also not hiring.
Finally, in my own home town, today a very encouraging headline, “Austin job picture brightens a bit.”
According to The Statesman:
The Austin region’s job picture improved slightly in March with an uptick in the job growth rate and a small drop in the unemployment rate from February, according to figures released Friday by the Texas Workforce Commission.
The 6.2 percent unemployment rate was down slightly from 6.3 percent in February. But it remains well above the 3.8 percent rate from March 2008.
However, job growth was at a 0.4 percent annual rate, up from 0.2 percent in February. In February, Austin was the only one among the nation’s 50 largest metro areas to have any job growth.
Have a nice weekend and keep that glass half full.
The author is a retired U.S. Air Force officer and a writer.