“The economy is not “strong” but it is improving. Unfortunately a lot of people here just simply don’t want to see it.”
Could you please elaborate. By what metric do you consider the economy improving?
GDP? - it just shrunk, not improving
Unemployment? - Static at best,but just creeped up a notch.
Labor force participation? (IMHO the most devastating and long lasting metric) - it keeps going down, down, down!
Debt vs GDP? - We’re in third world territory
The only bright spot in the economy is housing sales. But isn’t that how we got into this mess in the first place? Obama’s ‘Consumer Financial Protection Bureau’ has codified its new rules, and left the barn door wiiiide open. No down payment or credit check required to get a home loan (and all of the sudden the federal government is underwriting 9 out of 10 loans, so there is no risk in not running a credit check). Also, employment is not required (welfare payments count as ‘documented income’). The only restriction was a ban on interest only loans...except Fanniue and Freddie are exempt for 7 years. So to put it bluntly, the housing sector is being propped up by the imaginary creditworthiness of the federal government. Of course this is causing a bubble, which will pop.
So I have to ask - exactly how is the economy improving?
Housing is the bright spot but you are incorrect on the lending standards as banks are asking for significantly higher standards than the government requires. 780K housing starts in 2012 when the 50 year average is 1.5 million is anything but a bubble. Household formation was 1.4 million for 2012 which is above the 50 year average of 1.2 million which is why new and existing home inventories are back into normal ranges and even slightly below.
GDP declined because of huge decreases in defense spending. Consumer spending (71% of GDP) was up significantly. That being said 2% growth is anemic at best but we are not in a contraction.
Industrial production is almost back to pre-recession levels.
Capacity utilization is back up to 78.8% from the bottom in 2009 of 66.8%
US Household Net Worth is back up to levels not seen since 2007
US Corporate Profits are at all time highs.
Again, we are not in a “great” economy for sure. But it has improved. This is nowhere near where we were in 2008-10. It could also be a lot better if Obama would get the hell out of the way.