Attempts at summarizing an $11 trillion economy are almost certainly doomed to disappoint, but the prospect of failure never stopped your editor from reviewing the numbers to see what’s cookin’.
With that qualification out of the way, we turn to the economic numbers in the hope (however remote) of finding some crumbs of insight into where we’re headed. A smattering of quantitative morsels can be found in the table below. Drawing on numbers posted as of February 2007, there’s reason to think that the economy may have some growth left in it after all. In particular, note the robust gain in personal consumption expenditures for both February and for the past year. The death of Joe Sixpack’s inclination and ability to keep spending more has been predicted in some quarters, but to date there’s no sign of it.
There is, however, reason to worry that the housing correction will take a toll on the wider economy, as the red ink for new home sales and housing starts suggests. But all’s not lost yet in this corner. The rebound in starts in February (up by 9%) extends some hope that upside surprises are still possible.
In fact, as our thoroughly unscientific analysis implies, the recent past carries reason for optimism on the economic trend overall. Based on our limited sampling of numbers, February’s change in the economic reports was modestly higher by an average of 0.2%, as our table above shows. Of course, that compares to an average 12-month dip in the same numbers by 0.5%.
The question then is a familiar one: Are we in the midst of a dead-cat bounce or the start of a second economic wind? Alas, the answer is also one that you’ve heard before, although that won’t make it any more satisfying: It all depends on future economic reports.