Posted on 01/12/2007 3:20:36 PM PST by DredTennis
Call it the Rocky Economy–as in Rocky Balboa. During 2006, the U.S. economy took a beating (a 38 percent rise in gasoline prices, 100 basis points in Fed rate hikes, the end of the housing bubble) and got knocked hard to the mat (gross domestic product growth fell from 5.6 percent in the first quarter to 2.0 in the third). But now it looks as if the Rocky Economy is back on its feet and throwing haymakers. (OK, a merciful end to the over-the-top cinematic boxing analogy.)
Just look at today's powerful retail sales numbers for December. They rose a better-than-expected 0.9 percent. "Core" retail sales–excluding autos, gasoline, and building materials–rose by the same amount. On a year-to-year basis, this measure of "core" sales has accelerated to 6.9 percent growth from 5.7 percent in October.
Now compare these robust numbers with the end of 2000, when the economy was headed toward recession. Economist Michael Darda at MKM Partners did just that this morning and found the core measure of sales was growing only at a 3.5 percent pace back then– half its current growth rate. Darda concludes "those expecting consumption to slow sharply on the back of weakness in housing look to have made a bad bet. We continue to expect a strong labor market to propel strong wage/income/spending growth going forward."
Sorry, hard landers.
(Excerpt) Read more at usnews.com ...
Unless you are actively trying to sell your house, or your neighbors who have exactly the same tract house as you do are trying to sell, how do you know its price is going down ?
UH, excuse me. Knock knock. Hello? Anybody home? Sales don't make an economy. Production makes an economy. What are we going to do when everything we buy is made in China? Start exporting lap dances?
The average selling price for homes in a particular market is measured and reported widely, and it is not too much of a stretch to infer that one's specific home price is going down or up at any given time, this despite the ignorance of others on this forum.
In much the same way, the 'stock market' in general terms, or a specific market sector, is measured and reported as being 'up' or 'down', while an individual stock can of course vary.
But the way to bet is stock market up and house price down, at least for the moment.
The same senseless fear consumed America about Japan's economy in the '70's and '80's.
China's economy will certainly rise rapidly like Japan's, and then something else will happen.
China's product quality will either fail to make the transition to the level demanded by advanced nations, or it will and eventually price itself out of its competitive advantage.
You worry too much.
Houses just like mine are selling for double what I paid just three and a half years ago.
Hope is a lousy basis for a national policy.
Worked for New Orleans didn't it? :-)
In terms of dollar value, China represents, at the most, 5% of all imports into this country. The WSJ quoted 3% on Friday.
WAYR?
Consumers can stop buying inexpensive products from China in favor of more expensive American ones.
Buy they won't - the market is a force far greater than hope or Democrat fantasy.
The labor component of most Chinese products is virtually nil - our money is essentially going to repay the cost of materials, and mostly to give a profit to the local retailer.
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