Economic Data the Headlines Seem to Miss

It has been a summer of weather catastrophes and economic nightmares which make people nervous and afraid to make any moves. The numbers that are talked about daily are the high unemployment rate and the low GDP. Add to that short list, the declining home prices and you have a recipe for recession.

I would like to add a few other recent pieces of data that make me think that the evening news may just be missing something. Maybe these longer term trends aren’t as sexy or take more patience to appreciate. I would like things to happen faster on the positive side but the indications are that the positive curve is steadily rising.

The BEA reported today that real consumer spending increased in July to $9.428
trillion (2005 dollars), setting a new monthly record (see chart above).
Consumer spending in July increased by 0.46% from June, and by 2.3% from a year ago. That was the highest monthly increase in consumer spending since December 2009, 19 months ago.

Over the most recent three-year period through July, overall prices have increased by only 2.87% for the CPI: All Items index, or 0.95% per year on an average annual compounded basis, and that’s the lowest three-year inflation rate since January 1957.

Relocation of manufacturing back to the U.S. is a growing trend that reflects
the reality that labor arbitrage is quickly disappearing for outsourcing
manufacturing to China and other low-wage (but rapidly rising) countries.

As the Boston Consulting Group reported in May, “Within the next five years, the United States is expected to experience a manufacturing renaissance as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed world.

All of these reports have been reposted by Dr. Mark Perry on his blog Carpe Diem. I just thought you might like some good news.