Friday, May 1, 2009

An ever-so-slight uptick in the economy

Hanley Wood Market Intelligence’s Key Indicator Alert is out for the week and there is definitely some interesting data to be explored.

GDP decreased again for another quarter but at a rate less than last quarter. Businesses have slowed production so that they won’t be inundated with unwanted and unsaleable inventory. That makes perfect sense.

But personal consumption has actually risen slightly in the first quarter. Could we possibly be seeing the beginning of increasing demand? If so, economic growth may not be far behind.

New home prices are at their lowest point since December of 2003 and interest rates are the lowest in 39 years. What’s needed now is consumer confidence to ignite home buying. Of note is that existing home prices have risen slightly for the second month in a row while inventories of existing homes continue to work themselves down.

Unemployment, although still high, also increased by less than the previous week.

And the big news – the consumer confidence index is up.

All of this data may be telling us that the downslide is slowing and the bottom is near. Don’t get too excited yet, though. We’ve got a long way to go.