There are more signs the economy has bottomed and is set to improve. Economic
activity has exceeded economists’ predictions. The equity markets, a
forward looking economic indicator, suggest increased corporate profits.
Furthermore, strong governmental stimulus programs, like the housing credit and
Cash for Clunkers, have provided consumers with the appropriate incentives to
begin spending. Some pro-growth indicators include:
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New U.S. home sales climbed 9.6 percent in July, an increase for the fourth
consecutive month. Total existing home sales rose five percent from a year ago,
the first year-over-year increase since November 2005. Homes prices have
continued to remain low. This is good for homebuyers, both new and those
seeking to buy more house for their growing families.
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U.S. auto sales in July climbed to their highest pace in eleven months, as
customers responded well to our government's Cash for Clunkers program. Cash
for Clunkers generated nearly 700,000 new car sales and ended early due to
significant demand.
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There is evidence job layoffs have eased. While the economy is losing jobs each
month, it is losing fewer jobs and helping to ease consumer fears.
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Consumers are saving at an unusually high rate. As confidence increases, people
will begin to put those savings to work in investments and home improvements.
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Banks are being encouraged to continue to lend, and they are doing just
that. Banks are willing to take on additional risk through their lending
programs. Mortgages, auto loans, and small business loans are becoming
more available to more people.
A recovery does not mean everything is back to where it was. It means
things have stopped getting worse and are starting to get better. This recovery
may take more time than recoveries in the past, but it does appear it has
begun.
