Tuesday, February 17, 2009

Economic Good News, Until the Stimulus Kills It

Just to lazy to try to but the information together. Bits and pieces trickled out over the end of last week. It got drowned out as most important news does.

Signs of a bottom? MaxedOutMama: The Old Tried And True

"...the signs of US economic stabilization (not the bottom, but getting there) are beginning to pop up like weeds.

Retail Sales. There are several significant things about January. First, the weather was not favorable, and anyone who remembers the recent spate of weakening retail sales which were all attributed to snow and ice will get a chuckle out of the fact that retail sales rose this January. It appears that consumers are no longer as frightened of snow and/or the wrong color walls.

Second, auto sales increased, and dealer auto sales increased. Third, the SA retail total increased from December, although it is still 9% lower than Jan 09. Fourth, electronics picked up, clothing picked up, general merchandising picked up, and restaurants & bars picked up. The general pattern is one of recession, but the end to the steep fall in consumer spending. Half to 2/3rds of this is driven by the fall in gas and heating oil prices. The rest is due to the fact that things wear out and the financial conservatives are beginning to spend a bit. Between the two, employed people have a little more money each week in their pockets and they may not be willing to spend recklessly, but they are spending for things that are useful and needed."
It is to bad they are going to kill it off. As the government grows as a consumer it crowds out the the more dynamic individual consumers(the free market). They as well begin to set the rules not the market. Their biggest problem is the uncertainty they bring. What are they going to do next? How much money can they borrow? what happens to inflation a year from now? Are ever going to fix the actual problems. Their biggest problem is the uncertainty they bring. It all stifles the economy.

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