There are clear signs the economy is beginning to recover. Now that does not mean a bed of roses or that it will not be a long and protracted recovery nor does it mean that if you do not currently have a job that it does not totally suck right now for your situation...it simply means that we are moving in the right direction.
More importantly, the economic policies that Obama put in place about 100 days ago are working and have achieved their stated goals...to prevent a complete collapse of the economy and financial system like the Great Depression...we can all argue if other alternatives would have been fairer or better..but the fact is what POTUS Obama brilliantly worked...and Democrats will benefit in 2010...
http://www.reuters.com/...
The U.S. economy shrank slightly less in the first quarter than initially estimated, while corporate profits rebounded, according to government data on Friday that pointed to moderation in the recession.
Yes the economy still shrank in the 1st quarter but at less than originally estimated and that is despite the stubbornly high unemployment and underemployment numbers. I suspect that is due to the brilliant part of the stimulus package of extending unemployment benefits (highly stimulative) and cutting payroll tax withholding rates for workers so when you get a part-time job you have more money in your pocket...
"The recession is easing. The second quarter is shaping up to be a smaller decline of about 3.0 to 3.5 percent. It should be the last of the negative quarters," said Christopher Low, chief economist at FTN Financial in New York.
And second quarter is looking even better with decline in GDP 1/2 the rate of the previous 2 quarters...that will feel like an increase in GDP to many people and is a huge turnaround in only 100 days since the Obama economic policies have taken a foothold...
Perceptions that the worst of the 17-month-old downturn was over pushed consumer confidence to its highest in eight months in May, and a report showing business activity in New York City expanded in May for the first time since January 2008 offered a further hint the recession was abating.
Perceptions and expectations are reality for voters...and if people feel good about the future even if the economic recovery is not completed by the 2010 elections...Obama and the Democrats will get full credit for turning things around...
But the positive outlook for the economy was tainted by a report showing business activity in the country's Midwest unexpectedly fell sharply in April, likely reflecting troubles in the automotive sector.
The economic recovery will unfortunately not be even around the country...those hardest hit by real estate collapse and/or automotive debacle will continue to languish for some time into the future...that being said I believe those voters are unlikely to vote Republican and do not blame Obama for their woes...
U.S. stock indexes ended more than 1 percent higher as the rebound in corporate profits and the upbeat consumer confidence report helped to underpin investor morale. A rally in commodity prices lifted shares of natural resource companies.
Stock markets have been on fire since the Obama policies have taken effect. Now I know if you do not have a job and do not own stocks this does not affect you...but over 50% of the American people do and these are core swing voters...in addition it helps with the psychology of the consumer sentiment which will help Americans feel more confident about spending money again...Also you cannot discount retirees who cut way back as their portfolios shrank last year are now saying that well I guess we can spend a little more now...
The report on GDP suggested sharp belt tightening by business was paying off as corporate profits after taxes rose 1.1 percent in the January-March quarter, the first increase in a year. In the fourth quarter, profits had plummeted 10.7 percent, the biggest decline since the start of 1994.
Corporate profits (yes I know those evil corporations) increasing are a predicter of future investment in R&D an capital projects...so we should see an uptick in corporate spending soon...
Consumer spending, which accounts for over two-thirds of U.S. economic activity, rose 1.5 percent -- slower than the 2.2 percent rate estimated last month -- but still a turnaround after a sharp plunge in the second half of last year.
The rise in consumer spending which drives 2/3s of the economic engine of the economy is no longer on the decline...great news!!!
But spending could pick up in the third quarter as households grow more optimistic about the economy and the government's $787 billion package of spending and tax cuts filters through.
All this happened with only a small fraction of the stimulus package actually spent...the bulk of that spending will be happening in 2nd half of 2009 and during the election year of 2010...what a brilliant political move...accelerating spending as the election cycle happens...
The Reuters/University of Michigan Surveys of Consumers' sentiment gauge rose to 68.7 in May from 65.1 in April. That was the highest reading since September.
Most importantly, consumer sentiment is rising...those are voters people who will judge Obama and the Democrats in 2010...
So what about all the people who are unemployed and hurting...it will take a while and I personally know that their situations stink...but will that make them vote Republican...I think they know who caused this recession and who is ending the recession even if their own economic fortunes have not rebounded before the 2010 election...