Let us review some of the economic indicators as we close the month of October 2004.
Good news
Good news
- The Chicago Purchasing Managers Index rose to 68.5 from 61.9
- Consumer spending, which accounts for more than two-thirds of economic activity, grew at a 4.6% annual rate
- Few signs of inflationary pressures
- Business investment growth at strong 11.7%
- GDP growth, while not robust, is fairly strong
Bad news
- Continued loss in manufacturing jobs
- Almost anemic private sector-job growth
- Falling incomes (but as consumer spending stays high, it is very clear that credit levels are rising and savings levels are down)
- Three straight months of declining consumer confidence
- Out-of-control oil prices (Related article: Will oil shock cause a recession in 2005?)
iProceed's analysis of economic data
- We are tempted to think that US economy may be becoming more like those in England, France, Germany, Japan, Switzerland, and other similar developed countries (moderate growth, relatively high unemployment, overseas investment).
- While credit is fueling the economy right now (Oh, the optimistic Americans that we are!), how long can this last?
- Business investment growth continues but it seems that the benefits are coming to Americans only in form of lower prices (inflation is simply not an issue) not in form of jobs. While lower prices are good and will allow Americans to live on the lower income levels that they currently have, a large number of unemployed Americans is not good in the long run.