Positive Economic Signs

We're living through tough economic times and this has lead a number of people to worry that we might be heading toward a "worst case scenario." We've seen the housing bubble burst and take with it the precariously balanced financial sector. So, are we headed for a depression? I don't think so. Here's why.

We've been hearing news reports about how unemployment is at its highest rate in twenty-five years and how the housing market is worse than it's been since the early '80s. But let's think about that. If conditions are at the level they were in the early '80s, they aren't THAT bad. We were going through a recession, that's true, but it wasn't anywhere near as bad as the early '30s. The energy crisis of the early '70s was worse than what we went through in 1981 and what we're going through today. So basically, we're not even close to the kind of economic downturn that lead us into the Great Depression.

But just because things aren't as bad as they were in the '30s doesn't mean we're not heading in that direction -- right? Well, let's see if there are any economic indicators that suggest that the recession might be finding its bottom.

New housing starts surged 22% in February. That figure hasn't risen for eight months. http://money.cnn.com/2009/03/17/real_estate/housing_starts/index.htm?postve...

The Producer Price Index -- the measure of what domestic producers receive for their goods -- not counting the volatile food and energy sectors, rose .1% in February, up from .08% in January and higher than expected. http://money.cnn.com/2009/03/17/news/economy/producer_prices.reut/index.htm::QM:...

Bank of America, Citigroup, and JPMorgan Chase all reported profitability for January and February. Three institutions whose fear of failure brought on a large portion of the doom on Wall Street are already operating in the black. http://money.cnn.com/2009/03/13/markets/thebuzz/index.htm

General Motors "discovered" that they have more cash on hand than they originally estimated and thus do not need the additional bailout funds they called for a couple of weeks ago. The restructuring they started to implement as a requisite for receiving their initial infusion of funds is starting to pay off. They are already on their way to profitability. http://money.cnn.com/2009/03/12/news/companies/gm_cash/index.htm

Sure there are still signs that our economy is in the throes of recession. There are signs that we may not have hit bottom yet. We're still receiving news of further layoffs and of companies floundering and failing. But unlike two or three months ago, we're receiving positive economic news as well. We may still have some suffering ahead, but at least the recovery is in sight.