While we’ve been seeing some signals that the economy is trending upward, I think there were some bigger signs that the economic growth is gaining enough traction to be able to sustain a period of growth and employment.
The first, last week, was the passage by the Senate, of the “health care bill.” While many small business owners were not in favor of that particular bill, the mere passage of it means that there are some contours beyond which the bill will not go — and that affords stability to the business climate.
The second, of course, came in the form of reports that Christmas shopping sales were higher than expected.
A late boost from procrastinating consumers and an extra day of shopping between Thanksgiving and Christmas increased total retail sales, excluding automobiles and gas, 3.6% over the year-earlier period through Christmas Eve, according to MasterCard Inc.’s SpendingPulse unit.
It seems to me that “retail is the new heavy industry.” That is, whereas some writers have lamented that the US has lost its “manufacturing base,” the new and genuine symbol of the economy is retail, where money and goods change hands. (And “goods” now including a lot of things like software — produce them once, distribute them anywhere). Given that retail sales account for 2/3 of the economy, a 3.6% rise is not insignificant in the current climate.
And a third (that I have seen) suggests that corporate optimism was at the highest level in six years.
Britain’s business leaders are more optimistic about the UK economy improving than at any point in the past six years, according to an annual survey of captains of industry. In the yearly Ipsos Mori Captains of Industry poll of 100 company bosses, 36 per cent thought that the economic situation would improve, compared with just 4 per cent last year.
The FT story goes on to suggest that most business leaders think government policies will not be helpful to the economy. But again, even though these policies may not be helpful, folks know what they are, and can plan for them.
These three signs seem to indicate that most people will go into the new year with the expectation of an improving year — that the recession is behind us. There may still be some bumps in the road, and even some significant ones. But on balance, things are moving forward.