Because I am optimistic about our economy, about Americans and about America, I have been writing about the “glimmers of economic hope” I see day after day, week after week, in our efforts to dig ourselves out of the economic mess we find our nation in.
Sometimes the glimmers are quite encouraging, sometimes they are faint, transient and hardly noticeable—but glimmers of hope they are.
Of course I am aware of negative economic developments; of temporary setbacks; of legitimate warnings that not everything is well; of purveyors of doom and gloom; and, alas, of those who would want our economy to fail.
This is a free country and Mr. Limbaugh et al have the right to hope for the worse.
But, by the same token, I and millions of Americans have the right to hope for the best for our country.
Of course, I am not an economic expert and I have made that abundantly clear.
While I periodically point to additional signs of recovery, the performance of the stock market over the past several months has been, in my lay opinion, one of those glimmers of hope.
And today was another such day.
U.S. stocks rallied again, sending the Standard & Poor’s 500 Index to 942, its highest close since November 5, raising the Dow Jones Industrial Average by 221 points to 8,721, the highest since January 8. The NASDAQ composite index rose 54 points, or 3.06 percent, to 1,828.
Let me hasten to add that there are many legitimate experts who still have some very grave concerns about our economy; who believe that the economy has not bottomed out yet; who foresee continued economic collapse; who even see us following “the Great Depression route.”
They view the ongoing market rally as a bear market rally. They predict continued volatility, say that we will be “retesting” the lows we have seen, and that such retesting could be frightening—that panic could return.
Most of these experts provide impressive theories and statistics to back up their predictions.
As a “non-expert,” all I can say or do is hope that the markets will continue to steadily move upwards, that other economic indicators will validate that our economy is truly recovering, and continue to highlight those glimmers of economic hope.
Here are today’s.
From Bloomberg.com:
Manufacturing in the U.S. shrank less than forecast in May as new orders increased for the first time since the recession began, a sign that companies are growing more confident the slump will end this year.
Spending on construction in the U.S. unexpectedly rose in April as the housing slump eased and more commercial projects got under way.
And globally:
China’s manufacturing expanded for a third month, driving stocks to the biggest gain since March and adding to evidence that the economy is recovering.
Europe’s benchmark Dow Jones Stoxx 600 jumped 2.9 percent, the biggest gain in two months, and the MSCI Asia Pacific Index advanced 1.9 percent to the highest since October. The MSCI Emerging Markets Index, up 61 percent the past three months, posted the steepest advance in almost a month with a 3.8 percent climb.
A U.K. manufacturing index rose more than economists forecast in May to the highest in a year, adding to signs that the recession may be past its worst.
Some are not at all convinced.
Donald Luskin, in his WSJ.com “Attention, Economic Optimists: Not So Fast,” has a cautious, albeit mixed message:
Today, our economy is definitely showing signs of coming out of a near-depression. Ironically, all our recovery has to fear is the recovery itself. What I mean is that there is the risk that recovery will get in its own way — that it could stall itself out before it really gets going.
We really are looking at the beginning of economic recovery here. The banking crisis is definitely over with the Treasury and its “stress tests” having finally blundered into a formula that has helped troubled banks get back on their feet. New jobless claims, historically an excellent coincident indicator of the end of recessions, appear to have peaked. New orders for capital goods have turned positive for the first time since before last summer’s financial crisis, and that’s an excellent leading indicator of an investment revival.
However, read his words of caution here.
My readers offer words of caution, too.
One reader consistently keeps me straight with doom and gloom news about the economy, and warns that “the day-to-day movement of the DOW is absolutely meaningless.”
Fair enough, but when one adds up all the “meaningless” upward movements of the Dow for the past several months and one comes up with a total upward movement of around 2,000 points, or close to 30 percent, from its lows since shortly after Obama inherited this mess, it is difficult to call them “meaningless.”
Anyway, let’s hope for many more of those “meaningless” upward movements of the markets and, more important, for additional favorable economic indicators that will eventually convince even the most skeptic readers that we are well on our way to recovery.
The author is a retired U.S. Air Force officer and a writer.